2021-22 Exhibit_B_Property_Boiler
2021-22 Property/Liability Coverage Documents T. 800.537.7790
Special District Risk Management Authority F. 916.231.4111 Rev. 07/1/2021 www.sdrma.org
Property and Boiler & Machinery Coverage
Exhibit B
PEPIP USA – Form 17
Policy No. APIP2122 (Declaration 32)
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 1 of 6
APIP SUMMARY OF BOUND SUB-LIMIT & DEDUCTIBLE CHANGES BELOW IS A SUMMARY OF BOUND CHANGES FOR THE 2021-2022 POLICY PERIOD AS OF AUGUST
Coverage 2020-2021 Sub-limit / Deductible 2021-2022 Sub-limit / Deductible Status
Miscellaneous Unnamed Locations
$25,000,000 Miscellaneous Unnamed Locations or existing Named Insured's excluding Earthquake coverage for Alaska and California locations. If Flood coverage is purchased for scheduled locations, this extension will extend to include Flood coverage for any location not situated in Flood Zones A or V.
$25,000,000 Miscellaneous Unnamed Locations for Named Insureds with total insurable values greater than or equal to $500,000,000 at time of binding or $10,000,000 Miscellaneous Unnamed Locations for Named Insureds with total insurance values less than $500,000,000 at time of binding for existing Named Insured's excluding Earthquake coverage for Alaska and California locations. If Flood coverage is purchased for scheduled locations, this extension will extend to include Flood coverage for any location not situated in Flood Zones A or V.
Vacant and Unoccupied Buildings are sub-limited to $10,000,000.
Update
Automatic Acquisition
$25,000,000 Automatic Acquisition up to $100,000,000 or a Named Insured's Policy Limit of Liability if less than $100,000,000 for 120 days excluding licensed vehicles for which a sub-limit of $10,000,000 applies per policy Automatic Acquisition and Reporting Condition.
$25,000,000 Automatic Acquisition for Named Insureds with total insurable values greater than or equal to $500,000,000 at time of binding or $10,000,000 Automatic Acquisition for Named Insureds with total insurable values less than $500,000,000 at time of binding up to $100,000,000 or a Named Insured's Policy Limit of Liability if less than $100,000,000 for 120 days excluding licensed vehicles for which a sub-limit of $10,000,000 applies per policy Automatic Acquisition and Reporting Condition. Vacant and Unoccupied Buildings are sub-limited to $10,000,000.
Update
Money & Securities
$2,500,000 Money & Securities for named perils only as referenced within the policy.
$500,000 Money & Securities for named perils only as referenced within the policy, however fraudulent impersonation fraudulent instruction or similar events are excluded.
Update
Accidental Contamination
$250,000 Accidental Contamination per occurrence and annual aggregate per Named Insured with $500,000 annual aggregate for all Named Insureds per Declaration.
$250,000 Accidental Contamination per occurrence and annual aggregate per Named Insured with $500,000 annual aggregate for all Named Insureds per Declaration. Coverage shall not attach or become insurance upon any property which at the time of loss is more specifically described and covered under any
other policy form until the liability of such other insurance has first been exhausted and shall then cover only the excess of value of such property over and above the amount payable under such other insurance, whether collectible or not.
Update
Transit $25,000,000 Transit $25,000,000 Transit physicial damage only Clarification
Off Premiseses Vehicle Physical Damage
Per Occurrence for Off Premises Vehicle Physical Damage.
For Insureds who purchase this coverage with replacement cost valuation, the following minimum
deductibles apply:
• For vehicles with replacement cost value under $250,000, $25,000 deducitble, except $50,000 for all police vehicles;
• For vehicles with replacement cost value of $250,000 to $750,000, $100,000 deductible;
• For vehicles with replacement cost value in excess of $750,000, $250,000 deductible
the stated deductible will apply to vehicle physical damage both on and off-premises on a per occurrence basis, unless otherwise stated.
Update
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 2 of 6
APIP SUMMARY OF BOUND SUB-LIMIT & DEDUCTIBLE CHANGES BELOW IS A SUMMARY OF BOUND CHANGES FOR THE 2021-2022 POLICY PERIOD AS OF AUGUST
Coverage 2020-2021 2021-2022
Course of Contruction
$25,000,000 Course of Construction and Additions (including new) for projects with completed values not exceeding the sub-limit shown.
$25,000,000 Course of Construction and Additions (including new) for projects with completed values not exceeding the sub-limit shown. Projects valued greater than $15,000,000 require underwriting approval and a premium charge.
KEY MASTER POLICY FORM BOUND CHANGES
PLEASE REFER TO THE RED LINE STRIKE OUT VERSION OF THE MASTER POLICY FOR FULL DETAILS
Coverage 2020-2021 2021-2022
Policy Period July 1, 2020 to July 1,2021 July 1, 2021 to July 1,2022
Section I, E., 2. k.
Money and Securities
Money and Securities for Fire, Wind, Hail, Explosion, Smoke, Lightning, Riot, Civil Commotion, Impact by Aircraft or Objects falling there from, Impact by Vehicles, Water Damage and Theft (other than by an employee of the Named Insured(s)).
Money and Securities for Fire, Wind, Hail, Explosion, Smoke, Lightning, Riot, Civil Commotion, Impact by Aircraft or Objects falling there from, Impact by Vehicles, Water Damage and Theft (other than by an employee of the Named Insured(s)), however fraudulent impersonation, fraudulent instruction or similar events are excluded.
Section II, B. 4. Off Premises Service Interruption
It is understood and agreed that coverage under this Policy is extended to include physical damage, business interruption loss and/or extra expense incurred and/or sustained by the Named Insured as a result of physical damage to or destruction of property, by the perils insured against occurring during the policy period of any suppliers furnishing incoming electricity, fuel, gas, water, steam or refrigeration or outgoing sewerage, heat light, power, telephone or similar services to a Named Insured’s premises. The coverage provided by this clause is sub-limited to USD as per Declaration Page.
It is understood and agreed that coverage under this Policy is extended to include physical damage, business interruption loss and/or extra expense incurred and/or sustained by the Named Insured as a result of physical damage to or destruction of property, by the perils insured against occurring during the policy period of any suppliers furnishing
(1.) Incoming electricity, fuel, gas, water, steam, or refrigeration;
(2.) Data, voice or video service; or
(3.) Outgoing sewerage to an Insured Location.
The coverage provided by this clause is sub-limited to USD as per Declaration Page
Section II, B. 8.
Building Laws
This Policy is extended to include physical damage, business interruption loss, loss of interest and/or extra expense incurred and/or sustained by the Named Insured as a result of physical damage to or destruction of property, by the perils insured against occurring during the policy period and occasioned by the enforcement of any ordinance or law regulating the construction, repair or demolition of buildings or structures, which is in force at the time such a loss occurs, which necessitates the demolition of any portion of the covered building not damaged by the covered peril(s). The Company shall also be liable for loss due to the additional period of time required for repair or reconstruction in conformity with the minimum standards of such ordinance or law of the building(s) described in this Policy damaged by a covered peril. The Company shall not be liable under this clause for more than the limit of liability as shown elsewhere in this Policy.
Deleted in its entirety
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 3 of 6
Master Policy Form Wording Bound Changes Continued
PLEASE REFER TO THE RED LINE STRIKE OUT VERSION OF THE MASTER POLICY FOR FULL DETAILS
Coverage 2020-2021 2021-2022
Section II, B. 19. Automatic Acquisition and Reporting Conditions
See Red Line Strike Out of Master Policy Form for full wording
See Red Line Strike Out of Master Policy Form for full
wording. Partial wording changes provided below. This Policy is automatically extended to insure additional property and/or interests as described in this Policy, which may be acquired or otherwise become at the risk of the Named Insured, during the policy period, within the United States of America, subject to the values of such additional property and/or interests not exceeding a. USD25,000,000 for Named Insureds with total insurable values greater than or equal to USD500,000,000 at time of binding; b. USD10,000,000 for Named Insureds with total insurable values less than USD500,00,000 at time of binding; or c. Named Insured’s Policy Limit of Liability if less than USD25,000,000
Section II, B. 20.
Miscellaneous Unnamed Locations
Coverage is extended to include property at locations (including buildings or structures, owned, occupied or which the Named Insured is obligated to maintain insurance) located within the territorial limitations set by this Policy. Coverage provided by this clause is limited to any sub-limit noted on the Declaration Page attached to this form, and by terms and conditions of this policy form. This coverage extension does not apply to the peril of Earthquake Shock in the states of California, or Alaska. If Flood coverage is purchased for scheduled locations, this extension will extend to include Flood coverage for any location not situated in Flood Zones A or V.
Subject to the Miscellaneous Unnamed Locations sub-limit shown on the Declaration Page, this policy is extended to insure property of type not excluded located at Miscellaneous Unnamed Locations. Miscellaneous Unnamed Locations means a property that has not been included in the Schedule of Values on file with Alliant Insurance Services, Inc. as may be required in the Policy provisions elsewhere. There is no coverage under this paragraph for loss or damage which is covered under the Errors and Omissions or Automatic Acquisition provisions of this Policy. This coverage extension does not apply to the peril of Earthquake Shock in the states of California, or Alaska or Flood coverage for any property situated in Flood Zones A or V.
Section II, B. 21
Accidental Contamination
New paragraph added at the end of item: In accordance with Section IV, Item T., Other Insurance, coverage provided under this paragraph shall not attach or become insurance upon any property which at the time of loss is more specifically described and covered under any other policy form until the liability of such other insurance has first been exhausted and shall then cover only the excess of value of such property over and above
the amount payable under such other insurance, whether collectible or not.
Section II, C. 3
Property Not Covered
Land (including land on which covered property is located), and land values (except athletic fields, landscaping, artificial turf, sand traps, tees and greens).
Land (including land underneath or adjacent to a covered building or structure, and including costs to replace, repair, or stabilize any land, unless when necessary to protect a covered building or structure), and land values (except athletic fields, landscaping, artificial turf, sand traps, tees and greens). However, this policy does insure fill beneath any buildings or structures.
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 4 of 6
Master Policy Form Wording Bound Changes Continued
PLEASE REFER TO THE RED LINE STRIKE OUT VERSION OF THE MASTER POLICY FOR FULL DETAILS
Coverage 2020-2021 2021-2022
Section II. D. 4.
Loss Payment Basis / Valuation
On antique, restored or historical buildings, the cost of acquisition, relocation to the site and renovation or reconstruction. In the event of a partial loss, replacement cost for antique, restored or historical buildings shall mean the cost of repairing, replacing, constructing or reconstructing (whichever is less) the property on the same site using materials of like kind and quality necessary to preserve or maintain a buildings’ historical significance without deduction for depreciation.
On antique, restored or historical buildings, the cost of acquisition, relocation to the site and renovation or reconstruction without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair. In the event of a partial loss, Replacement Cost for antique, restored or historical buildings shall mean the cost of repairing, replacing, constructing or reconstructing (whichever is less) the property on the same site using materials of like kind and quality necessary to preserve or maintain a buildings’ historical significance without deduction for depreciation or allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair.
Section II. D. 9.
Loss Payment Basis / Valuation
“Replacement Cost” shall mean the cost of repairing, replacing, constructing or reconstructing (whichever is the least) the property on the same site, using new materials of like kind and quality and for like occupancy without deduction for depreciation subject to the following:
Replacement Cost definition has been modified to allow increased cost of construction to be covered under Section II, B. 10:
“Replacement Cost” shall mean the cost of repairing, replacing, constructing or reconstructing (whichever is the least) the property on the same site, using new materials of like kind and quality and for like occupancy without deduction
for depreciation or allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, subject to the following:
Section III. A. 2.
Extra Expense
(No change to HARPP Form
as this is where the wording came from)
See Red Line Strike Out of Master Policy Form for full wording.
New wording added:
With respect to Power Generating Facilities, Extra Expense shall also include any extra expense incurred resulting from the purchase of electrical power from any other power source, the coverage provided hereunder is sub-limited to USD as per Declaration Page.
However, this Policy shall not cover loss of Bonus Capacity Payments, performance Guarantee penalties or any other indirect or remote loss of whatever nature.
Section III. B. 4.
Contingent Time Element Coverage
See Red Line Strike Out of Master Policy Form for full wording.
New wording added to the end of this item:
This coverage applies to the Insured’s direct suppliers or direct customers located in the Coverage Territory.
Notwithstanding the foregoing, this Additional Coverage does not apply to:
a. Any supplier of electricity, gas, fuel, steam, water, refrigeration, sewerage service, Cloud Computing Service or data, voice or video service; or
b. The Insured’s customers, if the Insured is a supplier of electricity, gas, fuel, steam, water, refrigeration, sewerage service, Cloud Computing Service or data, voice or video service.
(Note: A Cloud Computing Service definition has been added under Section II. E. 6.)
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 5 of 6
Master Policy Form Wording Bound Changes Continued
PLEASE REFER TO THE RED LINE STRIKE OUT VERSION OF THE MASTER POLICY FOR FULL DETAILS
Coverage 2020-2021 2021-2022
Section IV, B.
15.
Second to last sentence:
Notwithstanding Section IV, Item T., Other Insurance, coverage provided under this paragraph shall apply as primary. Nothing herein contained shall be held to waive, vary, alter or extend any condition or provision of the Policy other than as above stated.
In accordance with Section IV, Item T., Other Insurance, coverage provided under this paragraph shall not attach or become insurance upon any property which at the time of loss is more specifically described and covered under any other policy form until the liability of such other insurance has first been exhausted and shall then cover only the excess of value of such property over and above the amount payable under such other insurance, whether collectible or not. Nothing herein contained shall be held to waive, vary, alter or extend any condition or provision of the Policy other than as above stated.
Section IV, B.
22. No exclusion.
Addition of the following exclusion added to the General
Conditions Section …: For buildings that are purchased, acquired or leased with the following conditions existing at the time of acquisition:
a. Building or any part of a building that is in danger of falling down or caving in, or
b. Any part of a building that has separated from another part of the building.
Loss or damage arising out of the above conditions is excluded;
However, the Company does cover loss or damage arising out of Collapse. Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose.
Section IV, H.
5.
Addition of the following item to the General Conditions
Section ..:
5. The Insured has permission to cease business operations or to have any insured building remain vacant or unoccupied, provided that fire protection, security and alarm services are maintained and written notice is given to the Company prior to the one-hundred twentieth (120th) consecutive day of cessation of business operations, vacancy. The insured building is considered vacant when:
a. Such building does not contain adequate Insured Property to conduct customary business operations; or
b. Such building is no longer used by the Insured, a
lessee or a sub-lessee to conduct customary business operations;
c. 70% or more of its total square footage is “vacant”; provided however, this provision shall not apply to any time period when customary business operations are suspended due to circumstances that are usual to such business operations.
2021-2022 Alliant Property Insurance Program (APIP) Summary of Bound Changes as of Aug. Page 6 of 6
Master Policy Form Wording Bound Changes Continued
PLEASE REFER TO THE RED LINE STRIKE OUT VERSION OF THE MASTER POLICY FOR FULL DETAILS
Coverage 2020-2021 2021-2022
Section IV, AH. 4. Insured Location(s) No Insured Location definition
Addition of the following definition added to the General Conditions Section …:
1. The location(s) within the Coverage Territory described in the most recent Statement of Values held on file with the Alliant Insurance Services, Inc., Miscellaneous Unnamed Locations and locations as covered by the Errors and Omissions and Automatic Acquisition Additional Coverages;
2. Unless otherwise set forth in the Statement of Values, each such Insured Location(s) shall be comprised of any building, yard, dock, wharf, pier or bulkhead or any group of the foregoing bounded on all sides by property lines, public streets, clear land space or open waterways, each not less than fifty (50) feet wide. Any bridge or tunnel crossing such street, space or waterway shall render such separation inoperative for the purpose of this definition.
Endorsement 3 (Applies to locations outside of the USA, its territories and possessions) (Applies worldwide)
Endorsement 5 LMA5400 Cyber Exclusion applicable to specific carriers Applicable to all carriers
PEPIP USA FORM No.17
MASTER POLICY WORDING
COVERAGE INCEPTING
FROM JULY 1, 2021 TO JULY 1, 2022
Public Entity Property Insurance Program (PEPIP) Form No.17
TABLE OF CONTENTS
Page
SECTION I ....................................................................................................................................................... 1
GENERAL PROVISIONS .............................................................................................................................. 1
A. INSURING AGREEMENT ....................................................................................................................... 1
B. NAMED INSURED................................................................................................................................... 1
C. MAILING ADDRESS OF NAMED INSURED ....................................................................................... 1
D. POLICY PERIOD ...................................................................................................................................... 1
E. LIMITS OF LIABILITY ........................................................................................................................... 1
F. OPTIONAL COVERAGE PARTICIPATION.......................................................................................... 3
G. DEDUCTIBLE PROVISIONS .................................................................................................................. 4
H. UNIT OF INSURANCE DEFINED .......................................................................................................... 4
I. PRIORITY OF PAYMENTS .................................................................................................................... 4
SECTION II ..................................................................................................................................................... 5
PROPERTY DAMAGE .................................................................................................................................. 5
A. COVERAGE .............................................................................................................................................. 5
B. EXTENSIONS OF COVERAGE .............................................................................................................. 5
1. PERSONAL EFFECTS ...................................................................................................................................................... 5
2. PROPERTY IN COURSE OF CONSTRUCTION AND ADDITIONS ............................................................................ 5
3. FIRE FIGHTING EXPENSES ........................................................................................................................................... 6
4. OFF PREMISES SERVICES INTERRUPTION ............................................................................................................... 6
5. ARCHITECTS AND ENGINEERS FEES ........................................................................................................................ 6
6. CLAIM PREPARATION EXPENSES .............................................................................................................................. 7
7. EXPEDITING EXPENSES ................................................................................................................................................ 7
8. DEBRIS REMOVAL ......................................................................................................................................................... 7
9. DEMOLITION COST ........................................................................................................................................................ 7
10. INCREASED COST OF CONSTRUCTION ..................................................................................................................... 7
11. ERRORS AND OMISSIONS ............................................................................................................................................. 8
12. ANIMALS .......................................................................................................................................................................... 8
13. VALUABLE PAPERS ....................................................................................................................................................... 8
14. TRANSIT ........................................................................................................................................................................... 8
15. VEHICLES WHILE ON INSURED PREMISES .............................................................................................................. 9
16. ASBESTOS CLEAN UP AND REMOVAL ...................................................................................................................... 9
17. PROTECTION AND PRESERVATION OF PROPERTY ................................................................................................ 9
18. LEASEHOLD INTEREST ............................................................................................................................................... 10
19. AUTOMATIC ACQUISITION AND REPORTING CONDITIONS .............................................................................. 10
20. MISCELLANEOUS UNNAMED LOCATIONS ............................................................................................................ 12
21. ACCIDENTAL CONTAMINATION .............................................................................................................................. 12
C. PROPERTY NOT COVERED ................................................................................................................ 13
D. LOSS PAYMENT BASIS / VALUATION ............................................................................................ 13
SECTION III .................................................................................................................................................. 17
BUSINESS INTERRUPTION, EXTRA EXPENSE, RENTAL INCOME, TAX REVENUE
INTERRUPTION AND TUITION INCOME ............................................................................................ 17
A. COVERAGE ............................................................................................................................................ 17
1. BUSINESS INTERRUPTION.......................................................................................................................................... 17
2. EXTRA EXPENSE........................................................................................................................................................... 18
B. EXTENSIONS OF COVERAGE ............................................................................................................ 18
1. INGRESS / EGRESS ........................................................................................................................................................ 18
2. INTERRUPTION BY CIVIL AUTHORITY ................................................................................................................... 18
3. DEMOLITION AND INCREASED TIME TO REBUILD ............................................................................................. 18
4. CONTINGENT TIME ELEMENT COVERAGE ............................................................................................................ 19
5. TAX REVENUE INTERRUPTION ................................................................................................................................. 19
6. EXTENDED PERIOD OF INDEMNITY ........................................................................................................................ 20
7. EXPENSES TO REDUCE LOSS ..................................................................................................................................... 20
C. EXCLUSIONS ......................................................................................................................................... 20
2 Public Entity Property Insurance Program (PEPIP) Form No.17
D. CONDITIONS APPLICABLE TO THIS SECTION .............................................................................. 20
E. DEFINITIONS ......................................................................................................................................... 21
1. GROSS EARNINGS ........................................................................................................................................................ 21
2. MERCHANDISE ............................................................................................................................................................. 21
3. EXTRA EXPENSE........................................................................................................................................................... 21
4. RENTAL VALUE ............................................................................................................................................................ 22
5. PERIOD OF RESTORATION ......................................................................................................................................... 22
6. CLOUD COMPUTING SERVICE .................................................................................................................................. 22
SECTION IV .................................................................................................................................................. 23
GENERAL CONDITIONS ........................................................................................................................... 23
A. PERILS COVERED ................................................................................................................................ 23
B. EXCLUSIONS ......................................................................................................................................... 23
C. STATUTES.............................................................................................................................................. 28
D. TERRITORIAL LIMITS ......................................................................................................................... 28
E. REINSTATEMENT ................................................................................................................................ 28
F. FREE ON BOARD (F.O.B.) SHIPMENTS ............................................................................................ 28
G. BREACH OF CONDITIONS .................................................................................................................. 28
H. PERMITS AND PRIVILEGES ............................................................................................................... 29
I. PROTECTIVE SAFEGUARDS .............................................................................................................. 30
J. NO BENEFIT TO BAILEE ..................................................................................................................... 30
K. NOTICE OF LOSS .................................................................................................................................. 30
L. ARBITRATION OF VALUE .................................................................................................................. 30
M. PROOF OF LOSS .................................................................................................................................... 30
N. SETTLEMENT OF LOSS ....................................................................................................................... 30
O. SUBROGATION ..................................................................................................................................... 30
P. CANCELLATION ................................................................................................................................... 31
Q. ABANDONMENT .................................................................................................................................. 31
R. ASSIGNMENT ........................................................................................................................................ 31
S. SALVAGE ............................................................................................................................................... 31
T. OTHER INSURANCE ............................................................................................................................ 31
U. EXCESS INSURANCE ........................................................................................................................... 32
V. RIGHT TO REVIEW RECORDS FOLLOWING AN INSURED LOSS .............................................. 32
W. CONCEALMENT AND FRAUD ........................................................................................................... 32
X. FULL WAIVER....................................................................................................................................... 32
Y. SUIT AGAINST COMPANY ................................................................................................................. 33
Z. JOINT LOSS ADJUSTMENT – BOILER AND MACHINERY ........................................................... 33
AA. JOINT LOSS ADJUSTMENT – EXCESS PROPERTY ........................................................................ 34
AB. LENDER’S LOSS PAYABLE ................................................................................................................ 35
AC. SEVERAL LIABILITY NOTICE ........................................................................................................... 36
AD. LOSS PAYABLE PROVISIONS ............................................................................................................ 36
AE. LOSS ADJUSTMENT SERVICES ......................................................................................................... 38
AF. SERVICE OF SUIT CLAUSE (USA) APPLICABLE TO EXCESS CARRIERS ................................. 38
AG. DEFINITIONS ......................................................................................................................................... 39
1. OCCURRENCE ............................................................................................................................................................... 39
a. Windstorm ........................................................................................................................................................................ 39
b. Flood ................................................................................................................................................................................. 40
c. Flood Zone A and V ......................................................................................................................................................... 40
d. Earthquake Shock ............................................................................................................................................................. 40
2. PERSONAL PROPERTY OF OTHERS .......................................................................................................................... 41
3. IMPROVEMENTS AND BETTERMENTS .................................................................................................................... 41
4. INSURED LOCATION(S) means: ................................................................................................................................... 41
5. VALUABLE PAPERS AND RECORDS ........................................................................................................................ 42
6. TIER I WINDSTORM COUNTIES ................................................................................................................................. 42
7. TIER 2 WINDSTROM COUNTIES ................................................................................................................................ 43
AH. ADDITIONAL INSURED’S / LOSS PAYEES ...................................................................................... 44
3 Public Entity Property Insurance Program (PEPIP) Form No.17
SECTION V .................................................................................................................................................... 45
FINE ARTS .................................................................................................................................................... 45
A. COVERAGE ............................................................................................................................................ 45
1. PROPERTY COVERED .................................................................................................................................................. 45
2. “WALL TO WALL” (“NAIL TO NAIL”) COVERAGE ................................................................................................ 45
B. EXCLUSIONS ......................................................................................................................................... 45
C. LOSS PAYMENT BASIS / VALUATION ............................................................................................ 46
D. SPECIAL CONDITIONS ........................................................................................................................ 47
SECTION VI .................................................................................................................................................. 49
CONTRACTORS EQUIPMENT ................................................................................................................. 49
A. COVERAGE ............................................................................................................................................ 49
B. PERILS EXCLUDED .............................................................................................................................. 49
C. PROPERTY EXCLUDED....................................................................................................................... 50
D. LOSS PAYMENT BASIS / VALUATION ............................................................................................ 50
E. SPECIAL CONDITIONS ........................................................................................................................ 51
SECTION VII................................................................................................................................................. 52
ACCOUNTS RECEIVABLE ........................................................................................................................ 52
A. COVERAGE ............................................................................................................................................ 52
B. EXCLUSIONS ......................................................................................................................................... 52
C. LOSS PAYMENT BASIS / VALUATION ............................................................................................ 52
D. DEFINITIONS:........................................................................................................................................ 53
SECTION VIII ............................................................................................................................................... 54
UNMANNED AIRCRAFT ............................................................................................................................ 54
A. COVERAGE ............................................................................................................................................ 54
B. PERILS EXCLUDED .............................................................................................................................. 54
C. PROPERTY EXCLUDED....................................................................................................................... 55
D. LOSS PAYMENT BASIS / VALUATION ............................................................................................ 55
E. SPECIAL CONDITIONS ........................................................................................................................ 55
F. DEFINITIONS ......................................................................................................................................... 56
SECTION IX .................................................................................................................................................. 57
BOILER AND MACHINERY BREAKDOWN EXTENSION ................................................................. 57
ENDORSEMENT 1 ......................................................................................................................................... 67
ENDORSEMENT 2 ......................................................................................................................................... 68
ENDORSEMENT 3 ......................................................................................................................................... 69
ENDORSEMENT 4 ......................................................................................................................................... 70
ENDORSEMENT 5 ......................................................................................................................................... 71
1 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 1 of 72
SECTION I
GENERAL PROVISIONS
A. INSURING AGREEMENT
In consideration of the premium paid by the Named Insured to the Company, the Company agrees to
insure the following per the terms and conditions herein.
B. NAMED INSURED
As shown on the Declaration page, or as listed in the Declaration Schedule Addendum attached to this
Policy.
Member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the
Named Insured is required or has agreed to provide coverage, or as so named in the “Named Insured
Schedule” on file with Alliant Insurance Services, Inc., as their interests may appear which now exist or
which hereafter may be created or acquired and which are owned, financially controlled or actively
managed by the herein named interest, all jointly, severally or in any combination of their interests, for
account of whom it may concern, are covered within the limits provided to the individual Named Insured.
Lessors of interest in all property of every description covered hereunder are included herein as Insured’s
for their respective rights and interests, it being understood that the inclusion hereunder of more than one
covered party shall not serve to increase the Company’s limit of liability.
Mortgagees to whom certificates of coverage have been issued are covered hereunder as Insured’s in
accordance with the terms and conditions of Form 438 BFU NS, CP12 18 1091, or equivalent as required
by the mortgagee.
C. MAILING ADDRESS OF NAMED INSURED
AS PER DECLARATION PAGE
D. POLICY PERIOD
AS PER DECLARATION PAGE
E. LIMITS OF LIABILITY
Subject to specific exclusions, modifications, and conditions hereinafter provided, the liability of the
Company in any one occurrence regardless of whether one or more of the coverages of this Policy are
involved shall not exceed:
1. LIMITS OF LIABILITY
The Specific Limits of Liability as described in the Declaration Page apply per occurrence unless
indicated otherwise.
2 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 2 of 72
2. SUB-LIMITS OF LIABILITY
The following sub-limits of liability are provided as described in the Declaration Page and apply
per occurrence unless indicated otherwise. Coverage is provided only if a sub-limit of liability is
shown in the Declaration Page for that item, and do not increase the specific limits of liability.
The absence of a sub-limit of liability amount in the Declaration Page means that no coverage is
provided for that item. When a sub-limit refers to a covered peril, the sub-limit applies to all loss
and expense resulting from said peril, regardless of the number of coverages that may apply to
such loss or expense. In the event that a claim involves both a coverage that is sub-limited and a
peril that is sub-limited, the lesser of the two will apply.
a. Per occurrence, and in the annual aggregate as respects the peril of flood (for those
Named Insured(s) that participate in this optional dedicated coverage);
b. Per occurrence, and in the annual aggregate as respects the peril of earthquake shock for
those Named Insured(s) that participate in this optional dedicated coverage;
c. Combined Business Interruption, Rental Income, Tax Interruption and Tuition income
(and related fees) ;
d. Extra Expense;
e. Miscellaneous Unnamed Locations;
f. Automatic Acquisition. As per policy provisions;
g. Unscheduled Landscaping, tees, sand traps, greens, athletic fields and artificial turf if
specific values for such items have not been reported as part of the Named Insured(s)
schedule of values held on file with Alliant Insurance Services, Inc. This coverage
extension does not apply to the peril of Earthquake Shock in the states of California, or
Alaska. If Flood coverage is purchased for scheduled locations this extension will extend
to include Flood coverage for any location not situated in Flood Zones A or V;
h. Scheduled Landscaping, tees, sand traps, greens, athletic fields and artificial turf if
specific values for such items have been reported as part of the Named Insured(s) schedule
of values held on file with Alliant Insurance Services, Inc.;
i. Errors and Omissions;
j. Course of Construction and Additions;
k. Money and Securities for Fire, Wind, Hail, Explosion, Smoke, Lightning, Riot, Civil
Commotion, Impact by Aircraft or Objects falling there from, Impact by Vehicles, Water
Damage and Theft (other than by an employee of the Named Insured(s)), however
fraudulent impersonation fraudulent instruction or similar events are excluded;
l. Prize Giveaways solely as respects Named Insured(s) that participate in this optional
coverage;
m. Unscheduled Fine Arts (as more fully defined herein);
n. Accidental Contamination including owned land, land values and water owned by the
Named Insured(s);
o. Unscheduled infrastructure including but not limited to tunnels, bridges, dams, catwalks
(except those not for public use), roadways, highways, streets, sidewalks, culverts,
channels, levees, dikes, berms, embankments, landfills, docks, piers, wharves, street
lights, traffic signals, meters, road way or highway fencing (including guardrails), and all
similar property unless specific values for such items have been reported as part of a
Named Insured(s) schedule of values held on file in the offices of Alliant Insurance
Services, Inc. Unscheduled Infrastructure coverage is excluded for the peril of Earthquake
Shock, and for Federal Emergency Management Agency (F.E.M.A.) and/or any State
Office of Emergency Services (O.E.S.) declared disasters, providing said declaration
provides funding for repairs. Landfills include underground liners, installed liners, or
liners while being installed; installed geotextile mats or geotextile mats while being
installed; installed collection pipes or collection pipes while being installed; any material
or substance that make up the landfill; embankments; or material deposited or disposed
thereon. Landfills do not include the following located at a landfill site:
3 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 3 of 72
1. Buildings
2. Machinery and equipment
3. Stock and supplies
4. Contractor’s equipment
5. Vehicles
p. Increased Cost of Construction due to the enforcement of building codes / ordinance or
law.
q. Transit physical damage only;
r. Unscheduled Animals;
s. Unscheduled Watercraft; up to 27 feet. Unscheduled watercraft over 27 feet if held for
sale by the insured.
t. Off premises services interruption including extra expense resulting from a covered peril
at non-owned/operated location(s);
u. Separately as respects Contingent Business Interruption, Contingent Extra Expense,
Contingent Rental Value, and Contingent Tuition Income;
v. Per occurrence and in the annual aggregate as respects the peril of Earthquake Shock for
licensed vehicles, unlicensed vehicles, contractors equipment and fine arts combined for
all Named Insured(s) of this Declaration combined that do not purchase optional dedicated
Earthquake Shock coverage, and/or where specific values for such items are not covered
for optional dedicated Earthquake Shock coverage as part of the Named Insured(s)
schedule of values held on file with Alliant Insurance Services, Inc.;
w. Per occurrence and in the annual aggregate as respects the peril of Flood for licensed
vehicles, unlicensed vehicles, contractors equipment and fine arts combined for all Named
Insured(s) of this Declaration combined that do not purchase optional Flood coverage,
and/or where specific values for such items are not covered for optional dedicated Flood
coverage as part of the Named Insured(s) schedule of values held on file with Alliant
Insurance Services, Inc.;
x. Claim Preparation Expenses;
y. Expediting Expenses;
z. Separately as respects furs, jewelry, precious metals and precious stones;
aa. Business Interruption for Power Generation Facilities, which is understood to be part of
and not additional to the sub-limit of liability set forth in Item 2 c. above;
ab. Personal Property outside the U.S.A.;
ac. Unmanned Aircraft. As per policy provisions
ad. Mold/Fungus Resultant Damage. As per policy provisions
ae. Electronic Data Processing Media
af. Boiler Explosion and Machinery Breakdown (for those Named Insured(s) that participate
in this optional dedicated coverage).
F. OPTIONAL COVERAGE PARTICIPATION
It is understood and agreed that certain Named Insured’s participate in Optional Coverage on this Policy
as set forth below.
OPTIONAL COVERAGES IDENTIFICATION:
1. Earthquake Shock
2. Licensed Vehicles – Off Premises
3. Scheduled Fine Arts
4. Flood
5. Boiler Explosion and Machinery Breakdown
Such participation in the optional coverage(s) by the Named Insured is indicated in the Declaration Page,
and/or by endorsement to this Policy.
4 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 4 of 72
G. DEDUCTIBLE PROVISIONS
If two or more deductible amounts provided in the Declaration Page apply for a single occurrence the
total to be deducted shall not exceed the largest per occurrence deductible amount applicable.
Deductibles are shown on the Declaration Page, or by endorsement and may vary by member of a joint
powers authority (JPA) or risk sharing pool (Pool), or the coverage part pertaining to the loss.
Unless a more specific deductible is applicable for a particular loss, the “Basic Deductible” shown in the
Declaration Page, shall apply per occurrence. The company will not pay for loss or damage in any one
occurrence until the amount of the loss or damage exceeds the applicable deductible.
The “JPA/Pool Basic Deductible” – when applicable will be in excess of a JPA or Pool member’s
deductible amount. The Named Insured(s) deductible amount will be agreed upon between the JPA or
Pool and its members. The “JPA/Pool Basic Deductible” shown in the Declaration Page, shall apply per
occurrence. The company will not pay for loss or damage in any one occurrence until the amount of the
loss or damage exceeds the applicable constituent members’ deductible and the “JPA/Pool Basic
Deductible”, until the “JPA/Pool Annual Aggregate Amount” is exhausted.
The “JPA/Pool Annual Aggregate Amount” - when applicable is the accumulation of payments made by
the JPA or Pool that are categorized as “JPA/Pool Basic Deductibles” above. Once the annual aggregate
amount is reached, all subsequent losses in chronological order are subject to the “JPA/Pool Maintenance
Deductible” indicated in the Declaration Page. As with the “JPA/Pool Basic Deductible” this
maintenance deductible will be applicable in excess of the applicable JPA or Pool constituent member’s
deductible.
“Vehicle Physical Damage deductible” - if Off-Premises coverage is included/purchased, the stated
deductible will apply to vehicle physical damage both on and off premises on a per occurrence basis,
unless otherwise stated. If “Off-Premises” coverage is not included, On-Premises/In-Yard coverage is
subject to the All Risk “Basic Deductible”.
H. UNIT OF INSURANCE DEFINED
In the application of the Earthquake Shock, or specified Wind deductibles, in accordance with the
provisions of this Policy, each of the following shall be considered a Separate Unit of Insurance:
1. Each Separate Building or Structure;
2. The Contents of each Building or Structure;
3. Applicable Time Element Coverage of each separate Building or Structure; and
4. Property in each Yard.
The Company shall not be liable for loss to any Unit of Insurance covered hereunder unless such loss
exceeds the percentages stated in this Policy of the replacement values of such Unit of Insurance at the
time when such loss shall happen, and then only for its proportion of such excess.
I. PRIORITY OF PAYMENTS
In the event of loss caused by or resulting from more than one peril or coverage, the limit of liability of
the primary / underlying coverage shall apply first to the peril(s) or coverage(s) not insured by the excess
layers and the remainder, if any, to the peril(s) or coverage(s) insured hereunder. Upon exhaustion of the
limit of liability of the primary / underlying coverage, the excess layers shall then be liable for loss
uncollected from the peril(s) or coverage(s) insured hereunder, subject to the limit of liability and the
other terms and conditions as specified.
5 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 5 of 72
SECTION II
PROPERTY DAMAGE
A. COVERAGE
Subject to the terms, conditions and exclusions hereinafter contained, this Policy insures all property of
every description both real and personal (including improvements, betterments and remodeling), of the
Named Insured, or property of others in the care, custody or control of the Named Insured, for which the
Named Insured is liable, or under the obligation to insure.
B. EXTENSIONS OF COVERAGE
All coverage extensions are subject to the terms, conditions and exclusions of the Policy except insofar as
they are explicitly providing additional coverage.
1. PERSONAL EFFECTS
This Policy is extended to cover only such personal effects and wearing apparel of any of the
officials, employees, students and personal effects of the Named Insured named in this Policy for
which the Named Insured may elect to assume liability while located in accordance with the
coverage hereof, but loss, if any, on such property shall be adjusted with and payable to the
Named Insured.
2. PROPERTY IN COURSE OF CONSTRUCTION AND ADDITIONS
It is understood and agreed that as respects course of construction projects and additions, this
Policy will provide automatic coverage subject to the following conditions:
a. Project involves only real property on new or existing locations (excluding dams, roads,
and bridges).
b. Value of the project at the location does not exceed USD as per Declaration Page.
Projects that exceed this amount are subject to underwriting approval, prior to binding.
However, inadvertent failure to report projects within USD as per Declaration Page shall
not void coverage of said Project.
Additional Expenses - Soft Costs: This extension applies to new buildings or structures in the
course of construction up to the time that the new building(s) or structure(s) is initially occupied
or put to its intended use whichever occurs first.
The Company will cover the additional expenses (soft costs) of the Named Insured as defined
below for up to 25% of the estimated completed value of the project which results from a delay in
the completion of the project beyond the date it would have been completed had no loss or
damage occurred. The delay must be due to direct physical loss or damage to property insured
and be caused by or result from a peril not excluded by this Policy. The Company will pay
covered expenses when they are incurred.
a. Additional Interest Coverage – The Company will pay the additional interest on money
the Named Insured borrows to finance construction or repair.
b. Rent or Rental Value Coverage – The Company will pay the actual loss of net rental
income that results from delay beyond the projected completion date. But the Company
6 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 6 of 72
will not pay more than the reduction in rental income less charges and expenses that do
not necessarily continue.
c. Additional Real Estate Taxes or Other Assessments – The Company will pay the
additional real estate taxes or other assessments the Named Insured incurs for the period
of time that construction is extended beyond the completion date.
d. Additional Advertising and Promotional Expenses – The Company will pay the additional
advertising and promotional expense that becomes necessary as a result of a delay in the
completion of the project.
e. Additional Commissions Expense – The Company will pay the additional expenses, which
result from the renegotiating of leases following an interruption in the project.
f. Additional Architectural and Engineering Fees – The Company will pay the additional
architectural and engineering fees that become necessary as a result of a delay in the
completion of the project.
g. Additional License and Permit Fees – The Company will pay the additional license and
permit fees that become necessary as a delay in the completion of the project.
h. Legal and Accounting Fees – The Company will pay the additional legal and accounting
fees the Named Insured incurs as a result of a delay in the completion of the project.
3. FIRE FIGHTING EXPENSES
It is understood and agreed that the Company shall be liable for the actual charges of fire fighting
expenses including but not limited to those charged by municipal or private fire departments
responding to and fighting fire in / on, and/or protecting property included in coverage provided
by this Policy.
4. OFF PREMISES SERVICES INTERRUPTION
It is understood and agreed that coverage under this Policy is extended to include physical
damage, business interruption loss and/or extra expense incurred and/or sustained by the Named
Insured as a result of physical damage to or destruction of property, by the perils insured against
occurring during the policy period of any suppliers furnishing
(1.) Incoming electricity, fuel, gas, water, steam, or refrigeration;
(2.) Data, voice or video service; or
(3.) Outgoing sewerage
to an Insured Location. The coverage provided by this clause is sub-limited to USD as per
Declaration Page
5. ARCHITECTS AND ENGINEERS FEES
This Policy also insures as a direct result of physical loss or damage insured hereunder, any
architects and engineers’ fees.
7 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 7 of 72
6. CLAIM PREPARATION EXPENSES
This Policy also insures as a direct result of physical loss or damage insured hereunder any claim
preparation expenses including, but not limited to, auditors, consultants and accountants.
However, the expenses of public adjusters are specifically excluded.
7. EXPEDITING EXPENSES
In the event of physical loss or damage insured hereunder, it is understood and agreed that
coverage under this Policy includes the reasonable extra cost of temporary repair and of
expediting the repair of such damaged property of the Named Insured, including overtime and the
extra costs of express or other rapid means of transportation. This coverage provided by this
clause is sub-limited to USD as per the Declaration Page.
8. DEBRIS REMOVAL
This Policy also covers expenses incurred in the removal of debris of the property covered
hereunder from the Insured Location that may be destroyed or damaged by a covered peril(s).
This debris removal coverage does not apply to the cost to extract pollutants from land or water,
or to remove, restore or replace polluted land or water.
9. DEMOLITION COST
In the event of physical damage to property insured by a covered peril, this Policy is extended to
cover the cost of, and the additional period of time required for, demolishing any undamaged
portion of the covered property including the cost of clearing the site thereof, caused by loss from
any covered peril(s) under this Policy and resulting from enforcement of any ordinance or law
regulating the construction, repair or demolition of buildings or structures and in force at the time
of loss which necessitates such demolition.
10. INCREASED COST OF CONSTRUCTION
In the event of physical damage to property insured by a covered peril, this Policy is extended to
cover the increased cost of, and the additional period of time required for, repair or replacement
caused by the enforcement of any ordinance or law (including written guidelines used by the
department of corrections in any state) regulating the construction, repair or demolition of
buildings or structures, which is in force at the time such a loss occurs or which comes into force
within 6 months after such a loss occurs, which necessitates in repairing or replacing the building
covered hereunder which has suffered damage or destruction by the covered peril(s) or which has
undergone demolition, limited however, to the minimum requirements of such ordinance or law.
Insurance under this section does not apply to:
a. Costs associated with the enforcement of any ordinance or law which requires any Named
Insured or others to test for, monitor, clean up, remove, contain, treat, detoxify, or
neutralize, or in any way respond to, or assess the effects of substances declared to be
hazardous to health by a governmental agency; or
b. Loss due to any ordinance or law that:
i. The Named Insured was required to comply with before the loss even if the
building was undamaged; and
ii. The Named Insured failed to comply with.
The coverage provided by this clause is sub-limited to USD as per Declaration Page.
8 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 8 of 72
11. ERRORS AND OMISSIONS
No unintentional errors or unintentional omissions in description, location of property or
valuation of property will prejudice the Named Insured’s right of recovery but will be reported to
the Company as soon as practicable when discovered. The coverage provided by this clause is
sub-limited to USD as per Declaration Page. This extension does not increase any more specific
limit stated elsewhere in this Policy or Declaration.
12. ANIMALS
This Policy is extended to cover retraining expenses associated with the loss of specially trained
animals. Retraining expenses are included within the sub-limit provided, unless otherwise
scheduled.
Notwithstanding the foregoing it is hereby understood and agreed that solely as respects
Universities, hospitals, or other institutions of learning the following shall apply:
This Policy is extended to cover physical loss or damage to animals used for research subject to
applicable exclusions under Section IV (General Conditions) B. Exclusions.
13. VALUABLE PAPERS
This Policy is extended to cover Valuable Papers or the cost to reconstruct valuable papers
(including but not limited to research, redrawing or duplicating) physically lost or damaged by a
peril insured against during the term of this Policy.
14. TRANSIT
This Policy is extended to cover Personal Property of the Named Insured or property held by the
Named Insured in trust or on commission or on consignment for which the Named Insured may
be held legally liable while in due course of transit, worldwide, against all risks of Direct Physical
Loss or Damage not excluded by this Policy to the property insured occurring during the period of
this Policy.
Permission is hereby granted to the Named Insured without prejudice to this insurance to accept
the ordinary Bill-of-Lading used by carriers, including released and/or under-valued Bill-of-
Lading and/or Shipping or Messenger receipts; and the Named Insured may waive subrogation
against railroads under side track agreements; and except as otherwise provided, the Named
Insured shall not enter into any special agreement with carriers releasing them from their common
law or statutory liability.
This Policy also covers damage and loss of use:
a. Occasioned by the acceptance by the Named Insured, Insured’s agent, customer or
consignee(s) or others of fraudulent Bill-of-Lading, Shipping or Messenger receipts;
b. Obtained by fraud or deceit, perpetrated by any person(s) who may represent themselves
to be the proper party or parties to receive the property for shipment or to accept it for
delivery.
The coverage provided by this clause is sub-limited to USD as per Declaration Page.
9 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 9 of 72
15. VEHICLES WHILE ON INSURED PREMISES
This Policy is extended to cover vehicles while at an Insured Location against physical loss or
damage by a peril insured against during the term of this Policy.
16. ASBESTOS CLEAN UP AND REMOVAL
This Policy specifically excludes asbestos materials clean up or removal, unless asbestos is itself
damaged by a peril covered by this Policy, then asbestos cleanup or removal within the damaged
area, and applicable time element coverages, will be covered by this Policy.
In no event will coverage be extended to cover undamaged asbestos, including undamaged
asbestos in any portion of the building mandated by any governmental direction or request
declaring that asbestos material present in any undamaged portion of the Named Insured’s
property must be removed or modified, or;
any loss or expense including investigation or defense costs, caused by, resulting from, or
arising out of asbestos, exposure to asbestos, or any product containing asbestos, or;
any loss or expense normally provided by demolition, increased cost or building
ordinance.
The Named Insured must report to Underwriters the existence of the damage as soon as
practicable after the loss. However, this Policy does not insure any such damage first reported to
the Underwriters more than thirty six (36) months after the expiration, or termination, of this
Policy.
17. PROTECTION AND PRESERVATION OF PROPERTY
In the event of loss likely to be covered by this Policy, the Named Insured shall endeavor to
protect covered property from further damage and shall separate the damaged and undamaged
personal property and store in the best possible order, and shall furnish a complete inventory of
the destroyed, damaged and undamaged property to the Insurer.
In case of actual or imminent physical loss or damage of the type insured against by this Policy,
the expenses incurred by the Named Insured in taking reasonable and necessary actions for the
temporary protection and preservation of property insured hereunder shall be added to the total
physical loss or damage otherwise recoverable under the Policy and be subject to the applicable
deductible and without increase in the limit provisions contained in this Policy.
Due to the unique nature of Educational Facilities, Health Care Facilities and Jails where it is
deemed necessary to evacuate designated persons from the premises in order to reduce the
physical loss potential from an actual or imminent loss or damage by a peril not excluded herein,
the Company will pay reasonable and necessary evacuation expenses incurred by the Named
Insured. The following additional definitions apply to this Additional Time Element Coverage:
a. Designated persons means:
(1) Patients, residents and lawful occupants at an Insured Location, and/or
(2) Those employees who are essential to implement the mandatory evacuation order
at an Insured Location.
b. Evacuation expenses means expenses incurred during the evacuation period to:
(1) Transport designated persons to another location;
(2) House and maintain designated persons at another location;
(3) Return designated persons to the Insured Location or, if the Insured Location is not
habitable, to a suitable alternative location.
10 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 10 of 72
18. LEASEHOLD INTEREST
In the event of physical loss or damage of the type insured against by this Policy to real property of
the type insured this Policy, which is leased by the Named Insured, this Policy is extended to cover:
a. If as a result of such loss or damage the property becomes wholly un-tenantable or unusable
and the lease agreement requires continuation of the rent, the Company shall indemnify the
Named Insured for the actual rent payable for the unexpired term of the lease; or
b. If as a result of such loss or damage the property becomes partially un-tenantable or unusable
and the lease agreement requires continuation of the rent, the Company shall indemnify the
Named Insured for the proportion of the rent applicable thereto; or
c. If as a result of such loss or damage the lease is cancelled by the lessor pursuant to the lease
agreement or by operation of law, the Company shall indemnify the Named Insured for its
Lease Interest for the first three months following such loss or damage and for its Net Lease
Interest for the remaining unexpired term of the lease;
provided, however, that the Company shall not be liable for any increase in the amount
recoverable hereunder resulting from the suspension, lapse or cancellation of any license, or
from the Named Insured exercising an option to cancel the lease; or from any act or omission
of the Named Insured which constitutes a default under the lease; and provided further that
the Named Insured shall use any suitable property or service owned or controlled by the
Named Insured or obtainable from another source to reduce the loss hereunder.
The following definitions shall apply to this coverage:
(1) Lease Interest means the excess rent paid for the same or similar replacement
property over actual rent payable plus cash bonuses or advance rent paid (including
any maintenance or operating charges) for each month during the unexpired term of
the Named Insured’s lease.
(2) Net Lease Interest means that sum which placed at 8% interest compounded annually
would equal the Lease Interest (less any amounts otherwise payable hereunder).
19. AUTOMATIC ACQUISITION AND REPORTING CONDITIONS
This Policy is automatically extended to insure additional property and/or interests as described in
this Policy, which may be acquired or otherwise become at the risk of the Named Insured, during the
policy period, within the United States of America, subject to the values of such additional property
and/or interests not exceeding
a. USD25,000,000 for Named Insureds with total insurable values greater than or equal to
USD500,000,000 at time of binding;
b. USD10,000,000 for Named Insureds with total insurable values less than USD500,00,000 at
time of binding; or
c. Named Insured’s Policy Limit of Liability if less than USD25,000,000
any one acquisition excluding licensed vehicles, for which a limit of USD10,000,000 applies or
Named Insured’s Policy Limit of Liability if less than USD10,000,000. Additionally, automatic
coverage is granted for up to 60 days, subject to a sub-limit of USD2,500,000 for additional property
and/or interests in Tier 1 wind counties, parishes and independent cities for the states of Virginia,
11 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 11 of 72
North Carolina, South Carolina, Georgia, Alabama, Mississippi, Louisiana, Texas and/or situated
anywhere within the states of Florida and Hawaii.
If Flood coverage is purchased for all scheduled locations, this extension will extend to include Flood
coverage for any location not situated in Flood Zones A or V. In the event that coverage for Flood
for any location situated in Flood Zones A or V is required, it is to be agreed by the Company prior
to attachment hereunder.
This coverage extension does not apply to the peril of Earthquake Shock in the States of
California, or Alaska except as follows:
(1) At Policy inception, for those Named Insureds that purchase the earthquake shock
peril, per the sub-limit that appears on the Declaration Page, automatic coverage
applies for the peril of earthquake shock for a period of 30 days from date of
contractual requirement by any bond, certificate of participation or any similar
investment, for any new locations where there is such a contractual requirement to
provide earthquake shock coverage. Otherwise there is no Automatic Coverage for
Earthquake Shock for any other new locations in California and Alaska.
In the event of coverage being required for additional property and/or interest where the value
exceeds
a. USD25,000,000 for Named Insureds with total insurable values greater than or equal to
USD500,000,000 at time of binding;
b. USD10,000,000 for Named Insureds with total insurable values less than USD500,00,000 at
time of binding; or
c. Named Insured(s) Policy Limit of Liability if less than USD25,000,000
any one acquisition details of said property and/or interest are to be provided to the Company for its
agreement not later than one hundred and twenty (120) days from the date of the said additional
property and/or interest have become at the risk of the Named Insured, this Policy providing
coverage automatically for such period of time up to a maximum limit of USD100,000,000 or
Named Insured(s) Policy Limit of Liability if less than USD100,000,000.
After the reporting of a location added under automatic acquisition, the Company retains the right to
determine acceptability of all such property(ies). Additional premium will be calculated from the
date of acquisition, if values are in excess of USD25,000,000 for Named Insureds with total insurable
values greater than or equal to USD500,000,000 at time of binding or USD10,000,000 for Named
Insureds with total insurable values less than USD500,00,000 at time of binding.
In the event that the Named Insured fails to comply with the above reporting provision, then
coverage hereunder is sub-limited to USD25,000,000 for Named Insureds with total insurable values
greater than or equal to USD500,000,000 at time of binding or USD10,000,000 for Named Insureds
with total insurable values less than USD500,00,000 at time of binding or Named Insured’s
Policy Limit of Liability if less than USD25,000,000 any one occurrence.
Additional, or return premium due for endorsements issued during the policy period, such as
those for additions or deletions of values within or greater than as that which is provided in any
“Automatic Acquisition sub-limit” (including those for existing Named Insureds, new Named
Insureds to the PEPIP program, or new members to existing JPA Named Insureds) will be
processed on a quarterly basis. Issuance of the endorsements and calculation of pro-rata or return
premium, for these changes will be processed as of, and at the time of the transaction.
12 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 12 of 72
This Policy covers real or personal property of the type insured under this Policy that is
rented, leased, or purchased by the Insured after the inception date of this Policy, subject to the
sub-limits shown on the Declaration page. Coverage under this additional coverage ceases at the
earlier of the following dates:
A. One hundred twenty (120) days from the date of acquisition or lease of such property or
such other number of days shown in Section I for Automatic Acquisition, if applicable, or
B. When the automatic acquisition location is bound by Alliant Insurance Services, Inc.; or
C. Alliant Insurance Services, Inc. notifies the Insured that it will not bind the automatically
acquired location.
There is no coverage for any property that is partially or wholly insured under any other
insurance.
There is no coverage under this paragraph for loss or damage, which is covered under the Error
and Omissions or Miscellaneous Unnamed Locations provisions of this Policy.
20. MISCELLANEOUS UNNAMED LOCATIONS
Subject to the Miscellaneous Unnamed Locations sub-limit shown on the Declaration Page, this
policy is extended to insure property of type not excluded located at Miscellaneous Unnamed
Locations. Miscellaneous Unnamed Locations means property that has not been included in the
Schedule of Values on file with Alliant Insurance Services, Inc. as may be required in the Policy
provisions elsewhere.
There is no coverage under this paragraph for loss or damage which is covered under the Errors
and Omissions or Automatic Acquisition provisions of this Policy.
This coverage extension does not apply to the peril of Earthquake Shock in the states of
California, or Alaska or Flood coverage for any property situated in Flood Zones A or V.
21. ACCIDENTAL CONTAMINATION
This Policy is hereby extended to cover the reasonable and necessary cost for the cleanup,
removal and disposal of the actual not suspected presence of Pollutants or Contaminant(s) from
any source to Covered Property so as to restore the Covered Property to the same condition as
existed prior to loss. The coverage provided is sub-limited to USD as per Declaration page.
If such contamination or dispersal is itself caused by fire, lightning, impact from aircraft,
explosion, riot, civil commotion, smoke, collapse, vehicles, windstorm, hail, vandalism, malicious
mischief or leakage and accidental discharge from automatic fire protective systems whereupon
this extension shall provide coverage up to full limit of liability provided by this Policy.
For the purposes of this Accidental Contamination clause only, the term “Covered Property”, as
covered by this Policy, is held to include Land (and Land Values) on which Covered Property is
located whether or not the same are excluded by this Policy.
Pollutants or Contaminants means any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste, which after its release
can cause or threaten damage to human health or human welfare or causes or threatens damage,
deterioration, loss of value, marketability or loss of use to property insured hereunder, including,
but not limited to, bacteria, virus, or hazardous substances listed in applicable environmental
state, federal or foreign law or regulation, or as designated by the U.S. Environmental Protection
Agency or similar applicable state or foreign governmental authority. Waste includes materials to
13 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 13 of 72
be recycled, reconditioned or reclaimed. Pollutants or Contaminants does not include Fungus,
Mold or Spore.
It is further understood and agreed that this coverage clause shall not override anything contained
in Asbestos Clean Up and Removal in this Policy.
In accordance with Section IV, Item T., Other Insurance, coverage provided under this paragraph
shall not attach or become insurance upon any property which at the time of loss is more
specifically described and covered under any other policy form until the liability of such other
insurance has first been exhausted and shall then cover only the excess of value of such property
over and above the amount payable under such other insurance, whether collectible or not.
C. PROPERTY NOT COVERED
Except as for that which may be provided as an Extension of Coverage, this Policy does not cover:
1. Aircraft, Watercraft over 27 feet in length (other than watercraft held for sale by the insured), and
rolling stock, except scheduled watercraft, and rolling stock, light rail vehicles, subway trains and
related track maintenance vehicles for light rail and subway lines.
2. Standing timber, growing crops, water, except water which is normally contained within any type
of tank, piping system or other process equipment.
3. Land (including land underneath or adjacent to a covered building or structure, and including
costs to replace, repair, or stabilize any land, unless when necessary to protect a covered building
or structure), and land values (except athletic fields, landscaping, artificial turf, sand traps, tees
and greens). However, this policy does insure fill beneath any buildings or structures.
4. Property in due course of ocean marine transit.
5. Shipment by mail after delivery into the custody of the United States Post Office.
6. Power transmission lines and feeder lines more than 1,000 feet from an Insured Location unless
scheduled and specifically approved by the Company.
7. Underground pipes more than 1,000 feet from an Insured Location unless scheduled and
specifically approved by the Company.
8. Offshore property, oilrigs, underground mines, caverns, or underground storage facilities and their
contents. Railroad track is excluded unless values have been reported by the Named Insured.
9. Trees, plants, and shrubs unless their position and planting were undertaken by human agency,
such as landscaping.
D. LOSS PAYMENT BASIS / VALUATION
In case of loss to property of an Named Insured covered hereunder, the basis of adjustment shall be as of
the time and place of loss as follows:
1. On all real and personal property, including property of others in the care or control of the Named
Insured at the Replacement Cost (as defined below) at the time of the loss. If property is not
replaced within a reasonable period of time, then the actual cash value shall apply.
2. On improvements and betterments at the Replacement Cost at time of loss. without deduction for
depreciation. If property is not repaired or replaced within a reasonable period of time, then the
actual cash value shall apply. If replaced or repaired by others for the use of the Named Insured,
there shall be no liability hereunder. The Company agrees to accept and consider the Named
14 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 14 of 72
Insured as sole and unconditional owner of all improvements and betterments, any contract or
lease the Named Insured may have made to the contrary notwithstanding.
3. On manuscripts, mechanical drawings, patterns, electronic data processing media, books of
accounting and other valuable papers, the full Replacement Cost of the property at the time of loss
(including expenses incurred to recreate the information lost, damaged or destroyed, except as
may be limited by any separate policy provision) or what it would then cost to repair, replace or
reconstruct the property with other of like kind and quality. If not repaired, replaced or
reconstructed within a reasonable period of time, then not to exceed the cost of blank or
unexposed material.
4. On antique, restored or historical buildings, the cost of acquisition, relocation to the site and
renovation or reconstruction without allowance for any increased cost of repair or reconstruction
by reason of any ordinance or law regulating construction or repair. In the event of a partial loss,
Replacement Cost for antique, restored or historical buildings shall mean the cost of repairing,
replacing, constructing or reconstructing (whichever is less) the property on the same site using
materials of like kind and quality necessary to preserve or maintain a buildings’ historical
significance without deduction for depreciation or allowance for any increased cost of repair or
reconstruction by reason of any ordinance or law regulating construction or repair.
5. On property of others for which the Named Insured is liable under contract or lease agreement the
Company’s liability in the event of loss is limited to the Named Insured’s obligation as defined in
said contract or lease agreement but not to exceed the Replacement Cost.
15 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 15 of 72
6. On library contents, at Replacement Cost, or as follows, whichever is greater:
Category
Value (per item)
Juvenile Materials USD 50.52
Pamphlets USD 6.50
Magazines USD 13.10
Fiction USD 24.43
Non-Fiction USD 87.97
Dictionary USD 128.03
Encyclopedia USD 306.41
Thesaurus USD 46.83
Reference (other) USD 122.96
Abstracts USD 301.10
Textbook USD 111.38
Art Books USD 66.34
Film USD 295.41
Book/Diskette USD 111.52
Vinyl Records USD 88.63
DVD/VHS USD 59.08
Audio Cassette USD 32.49
Compact Discs USD 25.93
CD ROM USD 41.97
Books/Audio USD 79.46
Medical Atlas USD 189.85
Technical Law USD 161.11
Nanotechnology USD 186.04
Biotechnology USD 176.03
The above valuation is predicated on the values provided by the Library of Congress Dewey
Decimal system and adjusted for inflation.
The figures above do not include the “shelving cost” of each book. Therefore, the formula for
adjusting a library contents loss is:
“Number of items in a category that are replaced multiplied by the valuation figure plus associated
shelving costs”.
The actual cost per item in the final adjustment is to be computed as of the time and place of loss
or damage.
7. On Vehicles, on or off premises, where Replacement Cost (New) values are specified, loss or
damage shall be based on 100% of the Replacement Cost (New) at the time of loss. Partial losses
shall be based on the cost of repairing or replacing the damaged portion, up to the fair market
value of the Vehicle and/or Equipment. However, should these costs exceed the fair market value
then recovery shall be based upon the Replacement Cost (New).
If the values, provided by the Named Insured, provides a valuation based on Replacement Cost
(New), then recovery will be on the same basis, if replaced. If not replaced, the basis of recovery
shall be Actual Cash Value.
8. Animals: The stated value as per schedule on file with the Named Insured.
Notwithstanding the foregoing it is hereby understood and agreed that solely as respects
Universities, hospitals or other institutions of learning the following shall apply:
16 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 16 of 72
The stated value as per schedule on file with the Named Insured except Research Animals shall be
valued at the cost to replace with like kind and quality; including the increased value as a result of
prior research or experiments performed on the animal(s), accumulated cost of care and
maintenance, and the value of labor expended by research assistants and/or laboratory technicians.
9. Landscaping, artificial turf, sand traps, tees, putting greens and athletic fields; the actual
Replacement Cost of sod, shrubs, sand, plants and trees; however the Company’s liability for
replacement of trees, plants and shrubs will be limited to the actual size of the destroyed plant,
tree or shrub at the time of the loss up to a maximum size of 25 gallons per item but not to exceed
USD25,000 per item.
The aforementioned valuations shall also be used for the purpose of any minimum earned premium
and/or quarterly adjustments incurred.
Wherever the term “actual cash value” is used as respects real property or improvements and
betterment’s in this clause, or elsewhere herein, it shall mean Replacement Cost less depreciation.
“Replacement Cost” shall mean the cost of repairing, replacing, constructing or reconstructing
(whichever is the least) the property on the same site, using new materials of like kind and quality and for
like occupancy without deduction for depreciation or allowance for any increased cost of repair or
reconstruction by reason of any ordinance or law regulating construction or repair, subject to the
following:
a. Until the property is actually repaired, replaced or reconstructed, the maximum amount
recoverable shall be the actual cash value of the lost or damaged property;
b. Replacement shall be effected by the Named Insured with due diligence and dispatch;
c. Replacement need not be on same site, or of same or similar construction or occupancy provided
that the Company shall not be liable for any additional costs that are directly attributable to the
inclusion of this provision.
d. For historical buildings as more specifically defined in this Section.
e. In no event shall the Company’s liability exceed the amount actually and necessarily expended in
repairing or replacing (whichever is less) Covered Property or any part thereof.
It is understood and agreed that as respects Replacement Cost, the Named Insured shall have the option
of replacement with electrical and mechanical equipment having technological advantages and/or
representing an improvement in function and/or forming part of a program of system enhancement
provided that such replacement can be accomplished without increasing the Company's liability. The
Company shall be allowed to dispose of, as salvage, any non-proprietary property deemed unusable by
the Named Insured.
In the event the Named Insured should fail to comply with any of the foregoing provisions settlement
shall be made as if this Replacement Cost provision had not been in effect.
17 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 17 of 72
SECTION III
BUSINESS INTERRUPTION, EXTRA EXPENSE, RENTAL INCOME, TAX REVENUE
INTERRUPTION AND TUITION INCOME
Subject to the terms, conditions and exclusions stated elsewhere herein, this Policy provides coverage for:
A. COVERAGE
1. BUSINESS INTERRUPTION
Against loss resulting directly from interruption of business, services or rental value caused by
direct physical loss or damage, as covered by this Policy to real and/or personal property insured
by this Policy, occurring during the term of this Policy.
In the event of such loss or damage the Company shall be liable for the actual loss sustained by
the Named Insured for gross earnings as defined herein and rental value as defined herein
resulting from such interruption of business, services, or rental value; less all charges and
expenses which do not necessarily continue during the period of restoration. Due consideration
shall be given to the continuation of normal charges and expenses including payroll expenses to
the extent necessary to resume operations of the Named Insured with the same quality of service
which existed immediately preceding the loss.
With respect to business interruption for power generation facilities, the coverage provided
hereunder is sub-limited to USD as per Declaration Page.
Notwithstanding the foregoing it is hereby understood and agreed that solely as respects
Universities, hospitals or other institutions of learning the following shall apply:
In determining the amount of tuition income and related fees covered hereunder for the purpose of
ascertaining the amount of loss sustained, due consideration shall be given to:
a. Tuition income and related fees which are prevented from being earned or
received.
b. Other income derived from:
i. routine and special services;
ii. other operating and non-operating revenues, including but not limited to:
(1) research grants
(2) income under research contracts all dependent on continued
operations.
c. Donations and fund raising proceeds:
i. If a regularly scheduled fund raising drive for the sole benefit of the Named
Insured occurs during the period of interruption of operations, the revenue
produced by such drive shall be considered as follows in determining the
amount of loss:
(1) If the drive fails to produce an amount at least equal to the same
drive in the most recent prior solicitation, the shortage, to the extent
that it can be attributed to the interruption of the Named Insured’s
operations, shall be considered as loss of income;
18 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 18 of 72
(2) If the drive produces an amount equal to the same drive in the most
recent prior solicitation, there shall be considered no loss of income
from this source of revenue;
(3) If the drive produces an amount larger than the same drive in the
most recent prior solicitation, the excess shall be applied to reduce
the loss from other sources of revenue;
(4) If the drive is cancelled or postponed, such loss of revenue shall not
be considered as loss of income.
ii. The following shall be disregarded in determining the amount of loss:
(1) Donations and contributions which are a direct result of the
interruption of the Named Insured’s operations and are received by
the Named Insured during the period of interruption.
(2) Proceeds for fund raising drives or solicitations which are for the
sole benefit of the Named Insured and occur as a result of
interruption of the Named Insured’s operations.
2. EXTRA EXPENSE
This Policy is extended to cover the necessary and reasonable extra expenses occurring during the
term of this Policy at any location as hereinafter defined, incurred by the Named Insured in order
to continue as nearly as practicable the normal operation of the Named Insured’s business
following damage to or destruction of covered property by a covered peril which is at an Insured
Location. In the event of such damage or destruction, the Company shall be liable for such
necessary extra expense incurred for only such length of time as the Period of Restoration.
With respect to Power Generating Facilities, Extra Expense shall also include any extra expense
incurred resulting from the purchase of electrical power from any other power source, the
coverage provided hereunder is sub-limited to USD as per Declaration Page.
However, this Policy shall not cover loss of Bonus Capacity Payments, performance Guarantee
penalties or any other indirect or remote loss of whatever nature.
B. EXTENSIONS OF COVERAGE
1. INGRESS / EGRESS
This Policy is extended to insure the actual loss sustained during the period of time not exceeding
30 days when, as a direct result of physical loss or damage caused by a covered peril(s) specified
by this Policy and occurring at property located within a 10 mile radius of covered property,
ingress to or egress from the covered property covered by this Policy is prevented. Coverage
under this extension is subject to a 24-hour waiting period.
2. INTERRUPTION BY CIVIL AUTHORITY
This Policy is extended to include the actual loss sustained by the Named Insured, as covered
hereunder during the length of time, not exceeding 30 days, when as a direct result of damage to
or destruction of property by a covered peril(s) occurring at property located within a 10 mile
radius of covered property, access to the covered property is specifically prohibited by order of a
civil authority. Coverage under this extension is subject to a 24-hour waiting period.
3. DEMOLITION AND INCREASED TIME TO REBUILD
The Company shall, in the case of loss covered under this Policy, be liable also for loss to the
interest covered by the Policy, occasioned by the enforcement of any ordinance or law regulating
the construction, repair or demolition of buildings or structures and in force at the time such loss
19 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 19 of 72
occurs, which necessitates the demolition of any portion of the described building(s) not damaged
by the covered peril(s). The Company shall also be liable for loss due to the additional period of
time required for repair or reconstruction in conformity with the minimum standards of such
ordinance or law of the building(s) described in this Policy damaged by a covered peril.
THE COMPANY SHALL NOT BE LIABLE UNDER THIS CLAUSE FOR:
a. More than the limit of liability as shown elsewhere in this Policy.
b. Any greater proportion of any loss to the interest covered by this Policy than the amount
covered under this Policy on said interest bears to the total insurance and coverage on said
interest, whether all such insurance contains this clause or not.
4. CONTINGENT TIME ELEMENT COVERAGE
Business interruption, rental income, tuition income and extra expense coverage provided by this
Policy is extended to cover loss directly resulting from physical damage to property of the type
not otherwise excluded by this Policy at direct supplier or direct customer locations that prevents
a supplier of goods and/or services to the Named Insured from supplying such goods and/or
services, or that prevents a recipient of goods and/or services from the Named Insured from
accepting such goods and/or services. The coverage provided by this clause separately as respects
each of these coverage’s is sub-limited to USD as per Declaration Page.
This coverage applies to the Insured’s direct suppliers or direct customers located in the Coverage
Territory.
Notwithstanding the foregoing, this Additional Coverage does not apply to:
a. Any supplier of electricity, gas, fuel, steam, water, refrigeration, sewerage service, Cloud
Computing Service or data, voice or video service; or
b. The Insured’s customers, if the Insured is a supplier of electricity, gas, fuel, steam, water,
refrigeration, sewerage service, Cloud Computing Service or data, voice or video service.
5. TAX REVENUE INTERRUPTION
Except as hereinafter or heretofore excluded, this Policy insures against loss resulting directly from
necessary interruption of sales, property or other tax revenue including, but not limited to Tribal
Incremental Municipal Services Payments collected by or due the Named Insured as a result of
physical damage to or destruction of property, by the perils insured against occurring during the
policy period which is not operated by the Named Insured and which wholly or partially prevents the
generation of revenue for the account of the Named Insured.
The Company shall be liable for the actual loss sustained for only the length of time as would be
required with exercise of due diligence and dispatch to rebuild, replace or repair the contributing
property commencing with the date of damage to the contributing property, but not limited by the
expiration date of this Policy.
If the Named Insured has reported Tax Revenue Interruption values for which premium has been
charged, such loss recovery after deductible shall be limited to whichever is the least of:
1. The sub-limit USD3,000,000 insured on the Policy;
2. The actual loss sustained;
3. The difference in amount between 97.5% of the anticipated revenue and the actual
total revenue after the loss.
20 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 20 of 72
If the Named Insured has not reported Tax Revenue Interruption values, such loss recovery after
deductible shall be limited to whichever is the least of:
1. The actual loss sustained;
2. USD1,000,000 per occurrence
DEDUCTIBLE: Each loss or series of losses arising out of one event at each location shall be
adjusted separately and from the aggregate amount of all such losses 2.50% of the annual revenue
value shall be deducted.
6. EXTENDED PERIOD OF INDEMNITY
Business interruption including rental income, tax interruption, tuition income and extra expense
coverage provided by this Policy is extended for the additional length of time required to restore
the business of the Named Insured to the condition that would have existed had no loss occurred
commencing on either;
a. the date on which the Company’s liability would otherwise terminate or;
b. the date on which rebuilding, repairing or replacement of such property as has been lost,
damaged or destroyed is actually completed, whichever is later.
The Company’s liability under this extension shall terminate no later than the number of days
indicated in the Declaration Page for this item:
7. EXPENSES TO REDUCE LOSS
This Policy also covers such expenses as are necessarily incurred for the purpose of reducing loss
under this section (except incurred to extinguish a fire); but in no event to exceed the amount by
which loss is thereby reduced.
C. EXCLUSIONS
1. The Company shall not be liable for any increase of loss which may be occasioned by the suspension,
lapse, or cancellation of any lease or license, contract or order, unless such suspension, lapse, or
cancellation results directly from the interruption of business caused by direct physical loss or
damage covered by this Policy and, then the Company shall only be liable for such loss as affects the
Named Insured’s earnings during and limited to, the period of indemnity covered under this Policy.
2. With respect to loss resulting from damage to or destruction of media for, or programming records
pertaining to, electronic data processing or electronically controlled equipment, including data
thereon, by the perils insured against, the length of time for which the Company shall be liable
hereunder shall not exceed:
a. thirty (30) consecutive calendar days or the time required with exercise of due diligence
and dispatch to reproduce the data thereon from duplicates or from originals of the
previous generation, whichever is less; or,
b. the length of time that would be required to rebuild, repair or replace such other property
herein described as has been damaged or destroyed, but not exceeding eighteen (18)
calendar months, whichever is the greater length of time.
D. CONDITIONS APPLICABLE TO THIS SECTION
21 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 21 of 72
If the Named Insured could reduce the loss resulting from the interruption of business:
1. by complete or partial resumption of operation of the property whether or not such property be lost or
damaged, or;
2. by making use of merchandise or other property at the Insured Location or elsewhere;
such reduction shall be taken into account in arriving at the amount of the loss hereunder.
E. DEFINITIONS
1. GROSS EARNINGS
“Gross Earnings” is defined as the sum of:
a. total net sales and;
b. other earnings derived from the operation of the business
less the cost of;
c. merchandise sold including packaging materials and;
d. materials and supplies consumed directly in supplying the service(s) sold by the Named
Insured, and;
e. service(s) purchased from outside (not employees of the Named Insured) for resale that
does not continue under contract.
No other cost shall be deducted in determining gross earnings.
In determining gross earnings, due consideration shall be given to the experience of the business
before the date of loss or damage and the probable experience thereafter, had no loss occurred.
In the event that Real and/or Personal Property that does not normally produce an income,
sustains damage covered under this Policy, the actual recovery under this Policy shall be the
continuing fixed charges and expenses directly attributable to such non-productive property.
2. MERCHANDISE
Shall be understood to mean, goods kept for sale by the Named Insured, which are not the
products of manufacturing operations conducted by the Named Insured.
3. EXTRA EXPENSE
The term “extra expense”, whenever used in this Policy, is defined as the excess (if any) of the
total cost incurred during the period of restoration chargeable to the operation of the Named
Insured’s business over and above the total cost that would normally have been incurred to
conduct the business during the same period had no damage or destruction occurred. Any salvage
value of property obtained for temporary use during the period of restoration, which remains after
the resumption of normal operations, shall be taken into consideration in the adjustment of any
loss hereunder.
22 Public Entity Property Insurance Program (PEPIP) Form No.17 Page 22 of 72
4. RENTAL VALUE
The term “rental value” is defined as the sum of:
a. the total anticipated gross rental income from tenant occupancy as furnished and equipped
by the Named Insured, and;
b. the amount of all charges which are the legal obligation of the tenant(s) and which would
otherwise be obligations of the Named Insured, and;
c. the fair rental value of any portion of said property which is occupied by the Named
Insured, and;
d. any amount in excess of a., b. and c. (above) which is an obligation due under the terms
and conditions of any revenue bond, certificate of participation or other financial
instrument.
In determining rental value, due consideration shall be given to the experience before the date of
loss or damage and the probable experience thereafter had no loss occurred.
5. PERIOD OF RESTORATION
The period during which business interruption, extra expense, and or rental interruption applies
will begin on the date direct physical loss occurs and interrupts normal business operations and
ends on the date that the damaged property would have been repaired, rebuilt or replaced with due
diligence and dispatch, but not limited by the expiration of this Policy.
6. CLOUD COMPUTING SERVICE
The term Cloud Computing Service means a service (i) in the business of storing, managing and
processing electronic data for which the Insured has a written contract and (ii) that provides
access to and use of: software and/or a network of remote servers hosted away from an Insured
Location to store, manage or process such data.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 23 of 72
SECTION IV
GENERAL CONDITIONS
A. PERILS COVERED
Subject to the terms, conditions and exclusions stated elsewhere herein, this Policy provides
insurance against all risk of direct physical loss or damage occurring during the period of this Policy.
B. EXCLUSIONS
This Policy does not insure against any of the following:
1. Loss or damage caused by or resulting from moths, vermin, termites, or other insects,
inherent vice, latent defect, faulty materials, error in design, faulty workmanship, wear, tear
or gradual deterioration, rust, corrosion, wet or dry rot, unless physical loss or damage not
otherwise excluded herein ensues and then only for such ensuing loss or damage.
2. Physical loss or damage by settling, cracking, shrinkage, bulging, or expansion of pavements,
foundations, walls, floors, roofs or ceilings; all unless physical damage not otherwise
excluded by this Policy ensues, in which event, this Policy will cover only such ensuing
damage.
3. Delay or loss of markets (this exclusion shall be inapplicable to the extent inconsistent with
any time element coverage provided elsewhere herein).
4. Breakdown or derangement of machinery and/or steam boiler explosion, unless physical loss
or damage not otherwise excluded herein ensues and then only for such ensuing loss.
5. Loss or damage caused by or resulting from misappropriation, conversion, inventory
shortage, unexplained disappearance, infidelity or any dishonest act on the part of the Named
Insured, it’s employees or agents or others to whom the property may be entrusted (bailees
and carriers for hire excepted) or other party of interest.
6. Loss or damage caused by or resulting from electrical injury or disturbance from artificial
causes to electrical appliances, devices of any kind or wiring, unless physical loss or damage
not otherwise excluded herein ensues and then only for such ensuing loss. This exclusion
does not apply to data processing equipment or media.
7. Loss or damage to personal property resulting from shrinkage, evaporation, loss of weight,
leakage, breakage of fragile articles, marring, scratching, exposure to light or change in color,
texture or flavor, unless such loss is caused directly by fire or the combating thereof,
lightning, windstorm, hail, explosion, strike, riot, or civil commotion, aircraft, vehicles,
breakage of pipes or apparatus, sprinkler leakage, vandalism and malicious mischief, theft,
attempted theft, flood or earthquake shock (Earthquake Shock, and Flood, in the states of
Alaska, or California shall only apply to locations that are scheduled for Earthquake Shock
and Flood).
8. Loss or damage caused by rain, sleet or snow to personal property in the open (except in the
custody of carriers or bailees for hire).
9. Loss caused directly or indirectly, by:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 24 of 72
a. War, hostile or warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack
i. by any government or sovereign power (de jure or de facto), or by any
authority maintaining or using military, naval or air forces; or
ii. by military, naval or air forces; or
iii. by an agent of any such government, power, authority or forces;
b. any weapon of war employing atomic fission or radioactive force whether in time of
peace or war;
c. insurrection, rebellion, revolution, civil war, usurped power, or action taken by
governmental authority in hindering, combating or defending against such an
occurrence, seizure or destruction under quarantine or customs regulations,
confiscation by order of any government or public authority, or risks of contraband or
illegal transportation or trade.
10. Nuclear reaction or nuclear radiation or radioactive contamination from any cause, all
whether direct or indirect, controlled or uncontrolled, proximate or remote, or is contributed
to or aggravated by a Covered Cause of Loss. However:
a. If fire not otherwise excluded results, the Company shall be liable for the
direct physical loss or damage by such resulting fire, but not including, any loss or
damage due to nuclear reaction, nuclear radiation, or radioactive contamination, and
b. This Policy does insure against physical loss or damage caused by sudden and
accidental radioactive contamination, including resultant radiation damage, from
material used or stored or from processes conducted on an Insured Location, provided
that, at the time of such loss or damage, there is neither a nuclear reactor nor any new
or used nuclear fuel on an Insured Location.
11. As respects course of construction, the following exclusions shall apply:
a. The cost of making good: faulty or defective workmanship, materials, construction
and/or design, but this exclusion shall not apply to damage by a peril not excluded
resulting from such faulty or defective workmanship, materials, construction and/or
design.
b. The cost of non-compliance of, or delay in completion of contract.
c. The cost of non-compliance with contract conditions.
d. Contractors’ equipment or tools not a part of or destined to become a part of the
installation.
12. Loss or damage caused by Earthquake Shock unless a limit is shown on the Declarations for
Earthquake Shock this exclusion will apply.
13. Loss or damage caused by Flood unless a limit is shown on the Declarations for Flood this
exclusion will apply.
14. Loss, damage, cost, claim or expense, whether preventative, remedial or otherwise, directly
or indirectly arising out of or relating to:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 25 of 72
a. the recognition, interpretation, calculation, comparison, differentiation, sequencing or
processing of data involving one or more dates or times, by any computer system,
hardware, program or software, or any microchip, integrated circuit or similar device
in computer equipment or non-computer equipment, whether the property of the
Named Insured or not; or
b. any change, alteration, correction or modification involving one or more dates or
times, to any such computer system, hardware, program or software, or any
microchip, integrated circuit or similar device in computer equipment or non-
computer equipment, whether the property of the Named Insured or not.
Except as provided in the next paragraph, this Electronic Date Recognition Clause shall apply
regardless of any other cause or event that contributes concurrently or in any sequence to the
loss, damage, cost, claim or expense.
If direct physical loss or damage not otherwise excluded by this Policy results, then subject to
all its terms and conditions, this Policy shall be liable only for such resulting loss or damage.
Such resulting loss or damage shall not include physical loss or damage to data resulting
directly from a) or b) above, nor the cost, claim or expense, whether preventative, remedial,
or otherwise, arising out of or relating to any change, alteration, correction or modification
relating to the ability of any damaged computer system, hardware, program or software, or
any microchip, integrated circuit or similar device in computer equipment or non-computer
equipment to recognize, interpret, calculate, compare, differentiate sequence or process any
data involving one or more dates or times.
15. Loss or damage in the form of, caused by, arising out of, contributed to, or resulting from
fungus, mold(s), mildew or yeast; or any spores or toxins created or produced by or
emanating from such fungus, mold(s), mildew or yeast;
a. fungus includes, but is not limited to, any of the plants or organisms belonging to the
major group fungi, lacking chlorophyll, and including mold(s), rusts, mildews, smuts
and mushrooms;
b. mold(s) includes, but is not limited to, any superficial growth produced on damp or
decaying organic matter or on living organisms, and fungi that produce mold(s);
c. spores means any dormant or reproductive body produced by or arising or emanating
out of any fungus, mold(s), mildew, plants, organisms or microorganisms,
regardless of any other cause or event that contributes concurrently or in any sequence to
such loss.
This exclusion shall not apply to any loss or damage in the form of, caused by, contributed to
or resulting from fungus, mold(s), mildew or yeast, or any spores or toxins created or
produced by or emanating from such fungus, mold(s), mildew or yeast which the Insured
establishes is a direct result of a Covered Loss not otherwise excluded by the Policy, provided
that such fungus, mold(s), mildew or yeast loss or damage is reported to the Company within
twelve months from the expiration date of the Policy. In accordance with Section IV, Item T.,
Other Insurance, coverage provided under this paragraph shall not attach or become
insurance upon any property which at the time of loss is more specifically described and
covered under any other policy form until the liability of such other insurance has first been
exhausted and shall then cover only the excess of value of such property over and above the
amount payable under such other insurance, whether collectible or not. Nothing herein
contained shall be held to waive, vary, alter or extend any condition or provision of the Policy
other than as above stated.
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16. Loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting
from or in connection with the actual or threatened malicious use of pathogenic or poisonous
biological or chemical materials regardless of any other cause or event contributing
concurrently or in any other sequence thereto.
17. The following additional exclusions apply to animals covered under this Policy:
a. Death of any animal(s) from natural causes.
b. Death of any animal(s) that dies from an unknown cause unless:
i. upon the death of such animal a post-mortem examination conducted on the
animal by a licensed veterinarian, and if
ii. the veterinarian’s post-mortem report shows the cause of death to clearly fall
within the coverages of this Policy.
c. Death of any animal(s) as a result of surgical operation, including inoculation, unless
the necessity for same arises from a loss otherwise covered by this Policy.
d. The death or destruction of any animal(s) caused by, resulting from, or made
necessary by physical injury caused by or resulting from the activities of the injured
animal or other animals unless such death or destruction is the result of a loss
otherwise covered by this Policy.
e. The death of any animal(s) caused directly or indirectly by the neglect or abuse of the
Named Insured, his agent, employees or bailees (carriers for hire excepted) unless
such death is a result of a loss otherwise covered by this Policy.
f. The loss by death of any animal(s) as a result of parturition or abortion.
g. Loss resulting from depreciation in value caused by any animal(s) covered hereunder
becoming unfit for or incapable of filling the function or duties for which it is kept,
employed or intended unless such depreciation is a result of a loss otherwise covered
by this Policy.
h. Loss by destruction of any animal(s) on the order of the federal or any state
government, or otherwise as a result of having contracted or been exposed to any
contagious or communicable disease.
i. The removal or disposal of the remains of any animal(s) or the expense thereof unless
such removal or disposal is the result of a loss otherwise covered by this Policy.
j. The loss of any animal(s) that has been unnerved (the term “unnerved” to be
considered as meaning the operation of neurotomy for lameness).
k. Any claim consequent upon delay, deterioration, or loss of use or loss of market
arising from an event covered by this Policy.
18. Loss, damage, costs or expenses in connection with any kind or description of seepage and/or
pollution and/or contamination, direct or indirect, arising from any cause whatsoever, except
as provided in Section II Property Damage, B. Extension of Coverage, 21. Accidental
Contamination.
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Nevertheless, if fire is not excluded from this Policy and a fire arises directly or Indirectly
from seepage and/or pollution and/or contamination, any loss or damage covered under this
Policy arising directly from that fire shall (subject to the terms, conditions and limitations of
the Policy) be covered.
However, if the covered property is the subject of direct physical loss or damage for which
the Company has paid or agreed to pay, then this Policy (subject to its terms, conditions and
limitations) insures against direct physical loss or damage to the property covered hereunder
caused by resulting seepage and/or pollution and/or contamination.
The Named Insured shall give notice to the Company of intent to claim NO LATER THAN
TWELVE (12) MONTHS AFTER THE DATE OF THE ORIGINAL PHYSICAL LOSS OR
DAMAGE.
Notwithstanding the provisions of the preceding exclusions or any provision respecting
seepage and/or pollution and/or contamination, and/or debris removal and/or cost of clean up
in the Policy, in the event of direct physical loss or damage to the property covered
hereunder, this Policy (subject otherwise to its terms, conditions and limitations, including
but not limited to any applicable deductible) also insures, within the sum covered:
(a) expenses reasonably incurred in removal of debris of the property hereunder
destroyed or damaged from an Insured Location; and/or;
(b) cost of clean up at an Insured Location made necessary as a result of such
direct physical loss or damage;
PROVIDED that this Policy does not insure against the costs of decontamination or removal
of water, soil or any other substance on or under such premises.
19. Authorities Exclusion:
Fines, penalties or cost incurred or sustained by the Named Insured or imposed on the Named
Insured at the order of any Government Agency, Court or other Authority, in connection with
any kind or description of environmental impairment including seepage or pollution or
contamination from any cause.
20. The following exclusion applies to Terrorism:
Any act of terrorism. An act of terrorism means an act, including but not limited to the use
of the force or violence and/or the threat thereof, of any person or group(s) of persons,
whether acting alone or on behalf of or in connection with any organization(s) or
government(s), committed for political, religious, ideological or similar purpose including
the intention to influence any government and/or to put the public, or any section of the
public, in fear.
This Policy also excludes loss, damage, cost or expense of whatsoever nature directly or
indirectly caused by, resulting from or in connection with any action taken in controlling,
preventing, suppressing or in any way relating to the paragraph above.
If the Company allege that by reason of this exclusion, any loss, damage, cost or expense is
not covered by this insurance the burden of proving the contrary shall be upon the Named
Insured.
In the event any portion of this exclusion is found to be invalid or unenforceable, the
remainder shall remain in full force and effect. All other terms and conditions remain
unaltered.
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21. Lack of the following services:
a. incoming electricity, fuel, gas, water, steam or refrigeration;
b. outgoing sewerage; or
c. incoming or outgoing data, voice or video service;
all when caused by loss or damage to any property outside Insured Location(s).
However, the above do not apply to Off Premises Service Interruption.
22. For buildings that are purchased, acquired or leased with the following conditions existing at
the time of acquisition:
a. Building or any part of a building that is in danger of falling down or caving in, or
b. Any part of a building that has separated from another part of the building.
Loss or damage arising out of the above conditions is excluded;
However, the Company does cover loss or damage arising out of Collapse. Collapse means
an abrupt falling down or caving in of a building or any part of a building with the result that
the building or part of the building cannot be occupied for its current intended purpose.
C. STATUTES
If any of the articles of this Policy conflict with the laws or statutes of any jurisdictions in which this
Policy applies this Policy is amended to conform to such laws or statutes.
D. TERRITORIAL LIMITS
This Policy insures Real and Personal Property within the United States of America. Personal
Property is extended to Worldwide coverage. The coverage provided by this clause for Personal
Property is sub-limited to USD as per Declaration Page.
E. REINSTATEMENT
Any reduction in the amount insured hereunder due to payment of any loss or losses shall be
automatically reinstated for the balance of the term of this contract except as respects to the perils of
Earthquake Shock and Flood.
F. FREE ON BOARD (F.O.B.) SHIPMENTS
The Company shall be liable for the interest of the Named Insured at sole option of the Named
Insured, the interest of the consignee in merchandise, which has been sold by the Named Insured
under terms of F.O.B. point of origin or other terms usually regarded as terminating shippers’
responsibility short of point of delivery.
G. BREACH OF CONDITIONS
If any breach of a clause, condition or warranty of this Policy shall occur prior to a loss affected
thereby under this Policy, such breach shall not void the Policy nor avail the Company to avoid
liability unless such breach shall exist at the time of such loss under this contract or Policy, and be a
contributing factor to the loss for which claim is presented hereunder, it being understood that such
breach of clause or condition is applicable only to the property affected thereby. Notwithstanding
the foregoing, if the Named Insured establishes that the breach, whether contributory or not, occurred
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 29 of 72
without its knowledge or permission or beyond its control, such breach shall not prevent the Named
Insured from recovering under this Policy.
H. PERMITS AND PRIVILEGES
Anything in the printed conditions of this Policy to the contrary notwithstanding, permission is
hereby granted:
1. to maintain present hazards and hazards which are consistent with the current operation of
insured facilities;
2. to make additions, alterations, extensions, improvements and repairs, to delete, demolish,
construct and reconstruct, and also to include all materials, equipment and supplies incidental
to the foregoing operations of the property covered hereunder, while in, on and/or about the
premises or adjacent thereto;
3. for such use of the premises as usual and/or incidental to the business as conducted therein
and to keep and use all articles and materials usual and/or incidental to said business in such
quantities as the exigencies of the business require;
4. If a vacant location has not been reported as part of the Named Insured(s) schedule of values
held on file with Alliant Insurance Services, Inc., the coverage provided by this clause is sub-
limited to the Miscellaneous Unnamed Location – Vacant and Automatic Acquisition –
Vacant Sub-limit of USD as per Declaration Page.
5. The Insured has permission to cease business operations or to have any insured building
remain vacant or unoccupied, provided that fire protection, security and alarm services are
maintained and written notice is given to the Company prior to the one-hundred twentieth
(120th) consecutive day of cessation of business operations, vacancy. The insured building is
considered vacant when:
a. Such building does not contain adequate Insured Property to conduct customary business
operations; or
b. Such building is no longer used by the Insured, a lessee or a sub-lessee to conduct
customary business operations;
c. 70% or more of its total square footage is “vacant”;
provided however, this provision shall not apply to any time period when customary business
operations are suspended due to circumstances that are usual to such business operations.
This Policy shall not be prejudiced by:
1. any error in stating the name, number, street, or location of any building(s) and contents
covered hereunder, or any error or omission involving the name or title of the Named
Insured;
2. any act or neglect of the owner of the building, if the Named Insured hereunder is not the
owner, or of any occupant of the within described premises other than the Named Insured,
when such act or neglect is not within the control of the Named Insured, named herein; or
3. by failure of the Named Insured to comply with any of the warranties or conditions endorsed
hereon in any portion of the premises over which the Named Insured has no control.
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I. PROTECTIVE SAFEGUARDS
The Named Insured shall exercise due diligence in maintaining in complete working order all
protective safeguard equipment and services.
J. NO BENEFIT TO BAILEE
This Policy shall in no way inure directly or indirectly to the benefit of any carrier or other bailee.
K. NOTICE OF LOSS
In the event of loss or damage insured against under this Policy, the Named Insured shall give notice
thereof to ALLIANT INSURANCE SERVICES, INC., 100 Pine Street, 11th Floor, San Francisco,
CA 94111-1073. TEL NO. (877) 725-7695, FAX NO. (415) 403-1466 of such loss. Such notice is
to be made as soon as practicable after the inception of loss.
L. ARBITRATION OF VALUE
If the Named Insured and the Company fail to agree as to the amount of loss, each shall on the
written demand of other, made within sixty (60) days after receipt of proof of loss by the Company,
select a competent and disinterested appraiser, and the appraisal shall be made at a reasonable time
and place. The appraisers shall first select a competent and disinterested umpire, and failing for
fifteen (15) days to agree upon such umpire, then on the request of the Named Insured or the
Company, such umpire shall be selected by a judge of a court of record in the state in which such
appraisal is pending. The appraisers shall then appraise the loss, stating separately the fair market
value at the time of loss and the amount of loss, and failing to agree shall submit their differences to
the umpire. An award in writing of any two shall determine the amount of loss. The Named Insured
and the Company shall each pay their chosen appraiser and shall bear equally the other expenses of
the appraisal and umpire. The Named Insured shall not be held to have waived any of its rights by
any act relating to appraisal.
M. PROOF OF LOSS
The Named Insured shall render a signed and sworn proof of loss as soon as practical after the
occurrence of a loss, stating the time, place and cause of loss, the interest of the Named Insured and
of all others in the property, the value thereof and the amount of loss or damage thereto.
N. SETTLEMENT OF LOSS
All adjusted claims shall be paid or made good to the Named Insured within thirty (30 days after
presentation and acceptance of satisfactory proof of interest and loss at the office of the Company.
No loss shall be paid or made good if the Named Insured has collected the same from others.
O. SUBROGATION
In the event of any loss payment under this Policy, the Company, shall be subrogated to all the
Named Insured’s rights of recovery thereof against any person or organization and the Named
Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure
such rights.
As respects subrogation it is agreed that, after expenses incurred in subrogation are deducted, the
Named Insured and the Company shall share proportionately to the extent of their respective interests
as determined by the amount of their net loss. Any amount thus found to be due to either party from
the other shall be paid promptly.
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Notwithstanding the above wording, the Named Insured has the right to enter into an agreement that
releases or waives the Named Insured’s right to recovery against third parties responsible for the loss
if made before the loss occurred.
P. CANCELLATION
This Policy may be cancelled by the Named Insured at any time by written notice or surrender of this
Policy. This Policy may also be cancelled by or on behalf of the Company by delivering to the
Named Insured or by mailing to the Named Insured, by registered, certified or other first class mail
at the Named Insured’s address as shown in this Policy, written notice, not less than ninety (90) days
prior to the effective date of cancellation. The mailing of such notice as aforesaid shall be sufficient
proof and this Policy and shall terminate at the date and hour specified in such notice.
Notwithstanding what has been stated above, however, should this Policy be cancelled for non-
payment of assessment, the Company shall only be required to give the Named Insured ten (10)
days’ notice.
If this insurance in total shall be cancelled by the Named Insured, the Company shall retain the
customary short rate proportion of the premium hereon. If the Company elects to cancel coverage
mid-term, then such cancellation shall be handled on a pro-rata basis without short rate penalty.
In the event of cancellation the aggregate retention and specific limit amount shall be applied pro rata
with the balance, if any, to be paid to the Named Insured.
Payment or tender of any unearned premium by the Company shall not be condition precedent to the
effectiveness of cancellation but such payment shall be made forthwith.
Cancellation shall not affect coverage on any shipment in transit on date of cancellation. Coverage
will continue in full force until such property is safely delivered and accepted at place of final
destination.
It is understood and agreed that if the Named Insured cancels this Policy, the Policy is subject to
25% minimum earned premium regardless of the length of time coverage is in force.
Q. ABANDONMENT
There shall be no abandonment to the Company of any property.
R. ASSIGNMENT
Assignment or transfer of this Policy shall not be valid except with the written consent of the
Company.
S. SALVAGE
When, in connection with any loss hereunder, any salvage is received prior or subsequent to the
payment of such loss, the loss shall be figured on the basis on which it would have been settled had
the amount of salvage been known at the time the loss was originally determined. The salvage value
will be deducted from the claim or returned to the Company.
T. OTHER INSURANCE
Permission is hereby granted to the Named Insured to carry more specific insurance on any property
covered under this Policy. This Policy shall not attach or become insurance upon any property
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 32 of 72
which at the time of loss is more specifically described and covered under any other policy form
until the liability of such other insurance has first been exhausted and shall then cover only the
excess of value of such property over and above the amount payable under such other insurance,
whether collectible or not. This Policy, subject to its conditions and limitations, shall attach and
become insurance upon such property as respects any peril not covered by such other insurance and
not otherwise excluded herein.
In the event of a loss that is covered by other insurance, wherein this Policy is excess of any amount
paid by such other insurer, the other insurance shall be applied to the deductible amount stated
elsewhere. Should the amount paid by such other insurance exceed these deductibles, no further
deductibles shall be applied under this Policy.
U. EXCESS INSURANCE
Permission is granted for the Named Insured to maintain excess insurance over the limit of liability
set forth in this Policy without prejudice to this Policy and the existence of such insurance, if any,
shall not reduce any liability under this Policy. Also it is understood and agreed as respects
earthquake shock or flood, that in the event of reduction or exhaustion of the aggregate limits of
liability under the underlying Policy(s) by reason of loss(es) hereunder, this Policy shall:
1. in the event of reduction, pay out excess of the reduced underlying limit and;
2. in the event of exhaustion, continue in force as the underlying Policy.
V. RIGHT TO REVIEW RECORDS FOLLOWING AN INSURED LOSS
The Named Insured as often as may be reasonably required, shall submit and so far as within their
power, cause all other persons interested in the property or employees to submit to examination
under oath by any person named by the Company relative to any and all matters in connection with a
claim, and produce for examination all books of account, bills, invoices and other vouchers or
certified copies thereof if originals be lost, at such reasonable time and place as may be designated
by the Company or their representatives and shall permit extracts and copies thereof to be made.
W. CONCEALMENT AND FRAUD
This entire Policy shall be void, if whether before or after a loss, the Named Insured has willfully
concealed or misrepresented any material facts or circumstance concerning this Policy of the subject
thereof, or the interest of the Named Insured therein, or in case of any fraud or false swearing by the
Named Insured relating thereto.
X. FULL WAIVER
The terms and conditions of this form and any approved endorsements supersede any policy jacket
that may be attached hereto.
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Y. SUIT AGAINST COMPANY
No suit, action or proceeding for the recovery of any claim under this Policy shall be sustainable in
any court of law or equity unless the Named Insured shall have complied with all the requirements of
this Policy, nor unless the suit is commenced within twelve (12) months after the date that the
Company has made its final offer of settlement or denial of the loss. However, that if under the laws
of the jurisdiction in which the property is located such limitation is invalid, then any such claims
shall be void unless such action, suit or proceedings be commenced within the shortest limit of time
permitted by the laws of such jurisdiction.
Z. JOINT LOSS ADJUSTMENT – BOILER AND MACHINERY
In the event of damage to or destruction of property, at a location designated in this Policy and also
designated in a boiler and machinery insurance policy, and there is a disagreement between the
Company and the Named Insured with respect to:
(i) Whether such damage or destruction was caused by a peril covered against by this
Policy or by an accident covered against by such boiler and machinery insurance
policy(ies) or;
(ii) The extent of participation of this Policy and of such boiler and machinery insurance
policy in a loss that is covered against, partially or wholly, by one or all of said
policy(ies).
The Company shall, upon written request of the Named Insured, pay to the Named Insured one-half
of the amount of the loss which is in disagreement, but in no event more than the Company would
have paid if there had been no boiler and machinery insurance policy(ies) in effect, subject to the
following conditions:
(i) The amount of loss which is in disagreement after making provisions for any
undisputed claims payable under the said policy(ies) and after the amount of the loss
is agreed by the Named Insured and the Boiler and Machinery Insurer and the
Company is limited to the minimum amount remaining payable under either the boiler
and machinery insurance policy(ies).
(ii) The boiler and machinery insurer(s) shall simultaneously pay to the Named Insured,
one-half of the said amount, which is in disagreement.
(iii) The payments by the Company and acceptance of the same by the Named Insured
signify the agreement of the Company to submit to and proceed with arbitration
within ninety (90) days of such payments:
The arbitrators shall be three (3) in number, one of whom shall be appointed by the boiler insurer(s)
and one of whom shall be appointed by the Company hereon and the third appointed by consent of
the other two, and the decision by the arbitrators shall be binding on the insurer(s) and the Named
Insured and that judgment upon such award may be entered in any court of competent jurisdiction.
(iv) The Named Insured agrees to cooperate in connection with such arbitration but not to
intervene therein.
(v) This agreement shall be null and void unless the Policy of the boiler and machinery
Insurer is similarly endorsed.
In no event shall an Insurer be obligated to pay more than their total single limit.
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AA. JOINT LOSS ADJUSTMENT – EXCESS PROPERTY
In the event of damage to or destruction of property at a location designated in this Policy and also
designated in an excess insurance policy(ies) and if there is disagreement between the insurers with
respect to:
(1) whether such damage or destruction was caused by a single event or by multiple
events or;
(2) the extent of participation of this Policy and any excess insurance policy in a loss
covered against partially or wholly, by one of said Policy or policy(ies).
The Company shall, upon written request of the Named Insured, pay to the Named Insured one-half
of the amount of the loss which is in disagreement, but in no event more than the Company would
have paid if there had been no excess insurance or policy(ies) in effect, subject to the following
conditions:
(1) the amount of loss which is in disagreement after making provisions for any
undisputed claims payable under the said policy(ies) and after the amount of the loss
is agreed by the Named Insured and the Company is limited to the minimum amount
remaining payable under either the primary insurance policy or excess insurance
policy(ies);
(2) the excess insurers shall simultaneously pay to the Named Insured one-half of the said
amount which is in disagreement, and;
(3) the payments by the Company hereunder and acceptance of the same by the Named
Insured signify the agreement of the Company to submit to and proceed with
arbitration within ninety (90) days of such payments.
The arbitrators shall be three (3) in number, one of whom shall be appointed by the excess insurer(s)
and one of whom shall be appointed by the Company and the third appointed by consent of the other
two, and the decision by the arbitrators shall be binding on the Company and the Named Insured, and
that judgment upon such award may be entered in any court of competent jurisdiction.
(4) The Named Insured agrees to cooperate in connection with such arbitration but not to
intervene therein.
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AB. LENDER’S LOSS PAYABLE
The following provisions (or equivalent) apply as required by “mortgages” and “lenders” to whom
certificates of coverage have been issued.
1. Loss or damage, if any, under this Policy, shall be paid to the Payee named on the first page
of this Policy, its successors and assigns, hereinafter referred to as “the Lender”, in whatever
form or capacity its interests may appear and whether said interest be vested in said Lender in
its individual or in its disclosed or undisclosed fiduciary or representative capacity, or
otherwise, or vested in a nominee or trustee of said Lender.
2. The insurance under this Policy, or any rider or endorsement attached thereto, as to the
interest only of the Lender, its successors and assigns, shall not be invalidated nor suspended:
(a) by any error, omission, or change respecting the ownership, description, possession,
or location of the subject of the insurance or the interest therein, or the title thereto;
(b) by the commencement of foreclosure proceedings or the giving of notice of sale of
any of the property covered by this Policy by virtue of any mortgage or trust deed;
(c) by any breach of warranty, act, omission, neglect, or non-compliance with any of the
provisions of this Policy, including any and all riders now or hereafter attached
thereto, by the Named Insured, the borrower, mortgagor, trustor, vendee, owner,
tenant, warehouseman, custodian, occupant, or by the agents of either or any of them
or by the happening of any event permitted by them or either of them, or their agents,
or which they failed to prevent, whether occurring before or after the attachment of
this endorsement, or whether before or after a loss, which under the provisions of this
Policy of insurance or of any rider or endorsement attached thereto would invalidate
or suspend the insurance as to the Named Insured, excluding here from, however, any
acts or omissions of the Lender while exercising active control and management of
the property.
3. In the event of failure of the Named Insured to pay any premium or additional premium
which shall be or become due under the terms of this Policy or on account of any change in
occupancy or increase in hazard not permitted by this Policy, the Company agrees to give
written notice to the Lender of such non-payment of premium after sixty (60) days from and
within one hundred and twenty (120) days after due date of such premium and it is a
condition of the continuance of the rights of the Lender hereunder that the Lender when so
notified in writing by this Company of the failure of the Named Insured to pay such premium
shall pay or cause to be paid the premium due within ten (10) days following receipt of the
Company’s demand in writing therefore. If the Lender shall decline to pay said premium or
additional premium, the rights of the Lender under this Lender’s Loss Payable Endorsement
shall not be terminated before ten (10) days after receipt of said written notice by the Lender.
4. Whenever the Company shall pay to the Lender any sum for loss or damage under this Policy
and shall claim that as to the Named Insured no liability therefore exists, the Company, at its
option, may pay to the Lender the whole principal sum and interest and other indebtedness
due or to become due from the Named Insured, whether secured or unsecured, (with refund
of all interest not accrued), and the Company, to the extent of such payment, shall thereupon
receive a full assignment and transfer, without recourse, of the debt and all rights and
securities held as collateral thereto.
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5. If there be any other insurance upon the within described property, the Company shall be
liable under this Policy as to the Lender for the proportion of such loss or damage that the
sum hereby insured bears to the entire insurance of similar character on said property under
policies held by, payable to and expressly consented to by the Lender. Any Contribution
Clause included in any Fallen Building Clause Waiver or any Extended Coverage
Endorsement attached to this contract of insurance is hereby nullified, and also any
Contribution Clause in any other endorsement or rider attached to this contract of insurance is
hereby nullified except Contribution Clauses for the compliance with which the Named
Insured has received reduction in the rate charged or has received extension of the coverage
to include hazards other than fire and compliance with such Contribution Clause is made a
part of the consideration for insuring such other hazards. The Lender upon the payment to it
of the full amount of its claim, will subrogate the Company (pro rata with all other insurers
contributing to said payment) to all of the Lender’s rights of contribution under said other
insurance.
6. The Company reserves the right to cancel this Policy at any time, as provided by its terms,
but in such case this Policy shall continue in force for the benefit of the Lender for ten (10)
days after written notice of such cancellation is received by the Lender and shall then cease.
7. This Policy shall remain in full force and effect as to the interest of the Lender for a period of
ten (10) days after its expiration unless an acceptable policy in renewal thereof with loss there
under payable to the Lender in accordance with the terms of this Lender’s Loss Payable
Endorsement, shall have been issued by some insurance company and accepted by the
Lender.
8. Should legal title to and beneficial ownership of any of the property covered under this Policy
become vested in the Lender or its agents, insurance under this Policy shall continue for the
term thereof for the benefit of the Lender but, in such event, any privileges granted by this
Lender’s Loss Payable Endorsement which are not also granted the Named Insured under the
terms and conditions of this Policy and/or under other riders or endorsements attached thereto
shall not apply to the insurance hereunder as respects such property.
9. All notices herein provided to be given by the Company to the Lender in connection with this
Policy and this Lender’s Loss Payable Endorsement shall be mailed to or delivered to the
Lender at its office or branch described on the first page of the Policy.
Approved: Board of Fire Underwriters of the Pacific; California Bankers’ Association – Committee
on Insurance
AC. SEVERAL LIABILITY NOTICE
The subscribing insurers’ obligations under contracts of insurance to which they subscribe are
several, not joint and are limited solely to the extent of their individual subscriptions. The
subscribing insurers are not responsible for the subscription of any co-subscribing insurer who for
any reason does not satisfy all or part of its obligations.
AD. LOSS PAYABLE PROVISIONS
A. LOSS PAYABLE
For covered property in which both insured and a Loss Payee have an insurable interest, the
Company will:
1. Adjust losses with the Named Insured, and;
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2. Pay any claim for loss or their damage jointly to the Named Insured and the Loss
Payee, as interests may appear.
B. LENDER’S LOSS PAYABLE
1. The Loss Payee is a creditor, including a mortgage holder or trustee, whose
interest in Covered Property is established by such written instruments as:
a. Warehouse receipts;
b. A contract for deed;
c. Bills of lading;
d. Financing statements or;
e. Mortgages, deeds of trust or security agreements.
2. For Covered Property in which both the Named Insured and a Loss Payee have an
insurable interest:
a. The Company will pay for covered loss or damage to each Loss Payee in their
order of precedence, as interests may appear.
b. The Loss Payee has the right to receive loss payment even if the Loss Payee
has started foreclosure or similar action on the Covered Property.
c. If the Company deny the Named Insured claim because of the insured act or
because the Named Insured have failed to comply with the terms of the
Coverage Part, the Loss Payee will still have the right to receive loss payment
if the Loss Payee:
(1) Pays any premium due under this Coverage Part at the Company’s
request if the Named Insured have failed to do so;
(2) Submits a signed, sworn proof of loss within ninety (90) days after
receiving notice from the Company of the Named Insured failure to
do so, and;
(3) Has notified the Company of any change in ownership, occupancy or
substantial change in risk known to the Loss Payee.
All of the terms of this Coverage Part will then apply directly to the Loss Payee.
d. If the Company pays the Loss Payee for any loss or damage and deny payment
to the Named Insured because of the Named Insured acts or because the
Named Insured have failed to comply with the terms of this Coverage Part:
(1) The Loss Payee’s rights will be transferred to the Company to the
extent of the amount the Company pays and;
(2) The Loss Payee’s rights to recover the full amount of the Loss
Payee’s claim will not be impaired.
At the Company’s option, the Company may pay to the Loss Payee the whole principal on
the debt plus any accrued interest. In this event, the Named Insured will pay the insureds’
remaining debt to the Company
3. If the Company cancels this Policy, the Company will give written notice to the Loss
Payee at least:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 38 of 72
a. Ten (10) days before the effective date of cancellation if the Company cancels
for the insured non-payment of premium or;
b. Thirty (30) days before the effective date of cancellation if the Company
cancels for any other reason.
4. If the Company elects not to renew this Policy, the Company will give written notice
to the Loss Payee at least ten (10) days before the expiration date of this Policy.
C. CONTRACT OF SALE
1. The Loss Payee is a person or organization the Named Insured have entered a contract
with for the sale of Covered Property.
2. For Covered Property in which both the Named Insured and the Loss Payee have an
insurable interest the Company will:
a. Adjust losses with the Named Insured and;
b. Pay any claim for loss or damage jointly to the Named Insured and the Loss
Payee, as interests may appear.
3. The following is added to the OTHER INSURANCE Condition:
For Covered Property that is the subject of a contract of sale, the word “the Insured”
includes the Loss Payee.
AE. LOSS ADJUSTMENT SERVICES
McLarens Young, International, 180 Montgomery Street, Suite 2100, San Francisco, California
94104-4231 is hereby authorized to represent the Company in the investigation and adjustment of
any loss or damage under this Policy at the expense of the Company and without regard to the
amount of loss or damage and/or applicable deductible if any.
However, the Company reserves the right to utilize other adjusting firms at its discretion.
AF. SERVICE OF SUIT CLAUSE (USA) APPLICABLE TO EXCESS CARRIERS
It is agreed that in the event of the failure of the Underwriters hereon to pay any amount claimed to
be due hereunder, the Underwriters hereon, at the request of the Named Insured (or Reinsured), will
submit to the jurisdiction of a Court of competent jurisdiction within the United States. Nothing in
this Clause constitutes or should be understood to constitute a waiver of Underwriters' rights to
commence an action in any Court of competent jurisdiction in the United States, to remove an action
to a United States District Court, or to seek a transfer of a case to another Court as permitted by the
laws of the United States or of any State in the United States. It is further agreed that service of
process in such suit may be made upon:
1. Lloyd’s America Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25th
Floor, New York, NY 10017 in respect of Insurers identified in Security Details section as
“Lloyd’s Stamp:” followed by 4 digits.
Mendes and Mount, 750 Seventh Avenue, New York, NY 10019-6829 are the nominee in
respect of any non-Lloyd’s participation on this Contract.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 39 of 72
Note FLWAService Corp, c/o Foley and Lardner LLP, 555 California Street, Suite 1700, San
Francisco, CA 94104-1520 are the nominee for CA (applicable to all markets except as noted
below)
2. Counsel, Legal Department, Lexington Insurance Company, 99 High Street, Boston,
Massachusetts, 02110 (applicable to Lexington Insurance Company)
3. XL Catlin Insurance Company UK Limited, LIRMA C7509: Sarah Mims, XL Global
Services Inc., 505 Eagleview Boulevard, Exton, PA 19341
and that in any suit instituted against any one of them upon this contract, Underwriters will abide by
the final decision of such Court or of any Appellate Court in the event of an appeal.
The above-named are authorized and directed to accept service of process on behalf of Underwriters
in any such suit and/or upon the request of the Insured (or Reinsured) to give a written undertaking to
the Insured (or Reinsured) that they will enter a general appearance upon Underwriters' behalf in the
event such a suit shall be instituted.
Further, pursuant to any statute of any state, territory or district of the United States which makes
provision therefore, Underwriters hereon hereby designate the Superintendent, Commissioner or
Director of Insurance or other officer specified for that purpose in the statute, or his successor or
successors in office, as their true and lawful attorney upon whom may be served any lawful process
in any action, suit or proceeding instituted by or on behalf of the Insured (or Reinsured) or any
beneficiary hereunder arising out of this contract of insurance (or reinsurance), and hereby designate
the above-named as the person to whom the said officer is authorized to mail such process or a true
copy thereof.
NMA1998 (amended)
AG. DEFINITIONS
1. OCCURRENCE
Each occurrence is defined as a loss, incident or series of losses or incidents not otherwise
excluded by this Policy and arising out of a single event or originating cause and includes all
resultant or concomitant insured losses. When the term applies to loss or losses from
earthquake shock, flood and/or windstorm, the following provisions shall apply:
a. Windstorm
Each loss by windstorm shall constitute a single claim hereunder; provided, if more
than one windstorm shall occur within any period of seventy-two (72) hours during
the term of this Policy, such windstorm shall be deemed to be a single windstorm
within the meaning thereof. The Named Insured may elect the moment from which
each of the aforesaid periods of seventy-two (72) hours shall be deemed to have
commenced but no two such seventy-two (72) hour periods shall overlap. The
Company shall not be liable for any loss occurring before the effective date and time
of the Policy. The Company will be liable for any losses occurring for a period of up
to seventy-two (72) hours after the expiration of this Policy provided that the first
windstorm loss or damage within that seventy-two (72) hours occurs prior to the date
and time of expiration of this Policy.
In the event of there being a difference of opinion between the Named Insured and the
Company as to whether or not all windstorm losses sustained by the Named Insured
during an elected period of seventy-two (72) hours arose out of, or was caused by a
single atmospheric disturbance, the stated opinion of the National Weather Service or
comparable Authority in any other country or locality shall govern as to whether or
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 40 of 72
not a single atmospheric disturbance continued throughout the period at the
location(s) involved.
b. Flood
Each loss by flood shall constitute a single loss hereunder.
1. If any flood occurs within a period of the continued rising or overflow of any
river(s) or stream(s) and the subsidence of same within the banks of such
river(s) or stream(s) or;
2. If any flood results from any tidal wave or series of tidal waves caused by any
one disturbance;
such flood shall be deemed to be a single occurrence within the meaning of this
Policy.
Should any time period referred to above extend beyond the expiration date of this
Policy and commence prior to expiration, the Company shall pay all such flood losses
occurring during such period as if such period fell entirely within the term of this
Policy.
The Company shall not be liable, however, for any loss caused by any flood occurring
before the effective date and time of this Policy or commencing after the expiration
date and time of this Policy.
Flood shall mean a general condition of partial or complete inundation of normally
dry land area from:
1. overflow of inland or tidal water;
2. unusual and rapid accumulation or run off of surface waters from any natural
source.
Flood shall also mean mudslide or mudflow, which is a river or flow of liquid mud
caused by flooding as defined in 1. or 2. above.
The definition of flood does not include ensuing loss or damage by fire, explosion,
or sprinkler leakage.
c. Flood Zone A and V
Flood zones A and V as referenced in this Policy is defined by FEMA as being
inclusive of all 100-year high risk flood areas. A one-hundred-year flood is a flood
event that has a 1% probability of occurring in any given year.
d. Earthquake Shock
With respect to the peril of earthquake shock, any and all losses from this cause
within a one hundred sixty-eight (168) hour period shall be deemed to be one loss.
The Named Insured may elect the moment from which each of the aforesaid periods
of one hundred sixty eight (168) hours shall be deemed to have commenced but no
two such one hundred sixty eight (168) hour periods shall overlap.
The Company shall not be liable for any loss caused by an earthquake shock
occurring before the effective date and time of this Policy. The Company will be
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 41 of 72
liable for any losses occurring for a period of up to one hundred sixty eight (168)
hours after the expiration of this Policy provided that the first earthquake shock loss
or damage within that one hundred sixty eight (168) hours occurs prior to the date and
time of the expiration of this Policy.
In the event of there being a difference of opinion between the Named Insured and the
Company as to whether or not all earthquake shock losses sustained by the Named
Insured during an elected period of one hundred sixty eight (168) hours arose out of,
or were caused by a single earthquake shock, the stated opinion of the National
Earthquake Information Center of the United States Department of the Interior or
comparable Authority in any other country or locality shall govern as to whether or
not a single earthquake shock continued throughout the period at the locations
involved.
The term earthquake shock is defined as: earth movement meaning natural faulting of
land masses, but not including subsidence, landslide, rock slide, earth rising, earth
sinking, earth shifting or settling unless as a direct result of such earth movement.
The definition of earthquake shock does not include ensuing loss or damage by fire,
explosion or sprinkler leakage. Further Earthquake Sprinkler Leakage is covered
outside of the “Earthquake Shock” definition and subject to the basic peril deductible.
2. PERSONAL PROPERTY OF OTHERS
Means, any property (other than real property) belonging to others for which a Named
Insured has assumed liability. This includes but is not limited to:
• Articles of Clothing
• Jewelry
• Sound Equipment
• Fine Arts (up to the sub-limit of unscheduled fine arts)
• EDP Media and Hardware
• Valuable Papers
• Portable Electronic Equipment
• Employee Tools
3. IMPROVEMENTS AND BETTERMENTS
Means, additions or changes made by a Named Insured / lessee at their own expense to a
building they are occupying that enhance the building’s value.
4. INSURED LOCATION(S) means:
1. The location(s) within the Coverage Territory described in the most recent Statement
of Values held on file with the Alliant Insurance Services, Inc., Miscellaneous Unnamed
Locations and locations as covered by the Errors and Omissions and Automatic
Acquisition Additional Coverages;
2. Unless otherwise set forth in the Statement of Values, each such Insured Location(s)
shall be comprised of any building, yard, dock, wharf, pier or bulkhead or any group of
the foregoing bounded on all sides by property lines, public streets, clear land space or
open waterways, each not less than fifty (50) feet wide. Any bridge or tunnel crossing
such street, space or waterway shall render such separation inoperative for the purpose of
this definition.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 42 of 72
5. VALUABLE PAPERS AND RECORDS
Means, all inscribed, printed, or written; documents, manuscripts or records; including but
not limited to abstracts, books, deeds, drawing, films, maps, or mortgages. Valuable Papers
are not money, securities, stamps or converted data program or instructions used in the
Named Insured’s data processing operations including the materials on which data is
recorded.
6. TIER I WINDSTORM COUNTIES
State Tier I Counties, Parishes or Independent Cities
Alabama Baldwin, Mobile
Connecticut Fairfield, Middlesex, New Haven, New London
Delaware Entire State, All Counties
Florida Entire State, All Counties
Georgia Bryan, Camden, Chatham, Glynn, Liberty, McIntosh,
Hawaii Entire State, All Counties
Louisiana Assumption, Calcasieu, Cameron, Iberia, Jefferson, Lafourche,
Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St.
James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa,
Terrebonne, Vermilion
Maine Cumberland, Hancock, Knox, Lincoln, Sagadahoc, Waldo,
Washington, York
Maryland Anne Arundel, Baltimore, Baltimore City, Calvert, Cecil,
Dorchester, Harford, Kent, Queen Anne’s, St. Mary’s, Somerset,
Talbot, Wicomico, Worcester
Massachusetts Barnstable, Bristol, Dukes, Essex, Middlesex, Nantucket, Norfolk,
Plymouth, Suffolk
Mississippi Hancock, Harrison, Jackson
New Hampshire Rockingham, Strafford
New Jersey Atlantic, Burlington, Cape May, Cumberland, Middlesex,
Monmouth, Ocean, Salem, Union
New York Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk
North Carolina Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan,
Columbus, Craven, Currituck, Dare, Hyde, Jones, New Hanover,
Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrell,
Washington
Rhode Island Entire State, All Counties
South Carolina Beaufort, Berkley, Charleston, Colleton, Georgetown, Horry,
Jasper
Texas Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston,
Harris (entire County), Jackson, Jefferson, Kennedy, Kleberg,
Liberty, Matagorda, Newton, Nueces, Orange, Refugio, San
Patricio, Victoria, Willacy
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 43 of 72
State Tier I Counties, Parishes or Independent Cities Continued
Virginia Accomack, Charles City, Chesapeake City, Gloucester, Hampton
City, Isle of Wight, James City, Lancaster, Mathews, Middlesex,
New Kent, Newport News, Norfolk City, Northampton,
Northumberland, Poquoson City, Portsmouth City, Prince George,
Suffolk City, Sussex, Surry, Virginia Beach City, Westmoreland,
Williamsburg City, York
7. TIER 2 WINDSTROM COUNTIES
State Tier II Counties, Parishes or Independent Cities
Georgia Brantley, Charlton, Effingham, Long, Wayne
Louisiana Acadia, Ascension, East Baton Rouge, Iberville, Jefferson Davis,
Lafayette, St. Martin (North), Washington, West Baton Rouge
Mississippi George, Pearl River, Stone
North Carolina Bladen, Duplin, Gates, Hertford, Lenoir, Martin, Pitt
South Carolina Florence, Marion, Williamsburg
Texas Bee, Brooks, Fort Bend, Goliad, Hardin, Hidalgo, Jasper, Jim Wells,
Wharton
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 44 of 72
AH. ADDITIONAL INSURED’S / LOSS PAYEES
It is hereby understood and agreed that the interest of Additional Insured’s and/or Loss
Payees is automatically included, as per schedule held on file with Alliant Insurance Services, Inc.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 45 of 72
SECTION V
FINE ARTS
A. COVERAGE
This Policy insures against all risks of direct physical loss of or damage except as hereafter excluded
occurring during the policy period to fine arts, which are the property of the Named Insured or the
property of others in the custody or control of the Named Insured while on exhibition or otherwise
within the limits of the United States.
If any of the property covered by this Section is also covered under any other provisions of the
Policy of which this Section is made a part, those provisions are hereby amended to exclude such
property, the intent being that the coverage under this Section is the sole coverage on such property.
1. PROPERTY COVERED
Objects of art of every kind and description, and property incidental thereto, which are the
property of the Named Insured, or the property of others in the custody and control of the
Named Insured, or in transit at the Named Insured’s risk, and property in which the Named
Insured shall have a fractional ownership interest which are owned by or have been leased,
loaned, rented or otherwise made available to the Named Insured. “Property” shall mean
paintings, drawings, etchings, prints, rare books, manuscripts, rugs, tapestries, furniture,
pictures, bronzes, potteries, porcelains, marbles statuary and all other bonafide works of art
and other objects of rarity, historic value, cultural interest or artistic merit, which are part of
the collections of the Named Insured, or in the care, custody or control of the Named
Insured, and their frames, glazing and shadow boxes.
2. “WALL TO WALL” (“NAIL TO NAIL”) COVERAGE
This Section covers the Named Insured’s property on a “Wall to Wall” (“Nail to Nail”) basis,
or domicile to domicile basis, as applicable, from the time said property is removed from its
normal repository incidental to shipment until returned thereto or other point designated by
the owner or owner’s agent prior to return shipment, including while in transit to or from
points of consolidation or deconsolidation, packing, repacking or unpacking, while at such
locations during such processes or awaiting shipment.
Coverage shall terminate upon arrival of the covered property at the final destination
designated by the owner or owner’s agent, or upon expiration of this Policy, whichever may
occur first, except that expiration of this Policy shall not prejudice coverage of any risk then
in transit.
B. EXCLUSIONS
1. Loss or damage occasioned by: wear and tear, gradual deterioration, insects, vermin, inherent
vice or damage sustained due to and resulting from any repairing, restoration or retouching
process;
2. Loss or damage caused by or resulting from:
a. War, hostile or warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack;
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 46 of 72
i. by any government or sovereign power (de jure or de facto), or by any
authority maintaining or using military, naval or air forces or;
ii. by military, naval or air forces; or
iii. by an agent of any such government, power, authority or forces;
b. Any weapon of war employing atomic fission or radioactive force whether in time of
peace or war;
c. Insurrection, rebellion, revolution, civil war, usurped power, or action taken by
governmental authority in hindering, combating or defending against such an
occurrence, seizure or destruction under quarantine or customs regulations,
confiscation by order of any government or public authority, or risks of contraband or
illegal transportation or trade.
3. Nuclear reaction or nuclear radiation or radioactive contamination from any cause, all
whether direct or indirect, controlled or uncontrolled, proximate or remote, or is contributed
to or aggravated by a Covered Cause of Loss. However:
a. If fire not otherwise excluded results, the Company shall be liable for the direct
physical loss or damage by such resulting fire, but not including, any loss or damage
due to nuclear reaction, nuclear radiation, or radioactive contamination, and
b. This Policy does insure against physical loss or damage caused by sudden and
accidental radioactive contamination, including resultant radiation damage, from
material used or stored or from processes conducted on an Insured Location, provided
that, at the time of such loss or damage, there is neither a nuclear reactor nor any new
or used nuclear fuel on an Insured Location.
4. Any dishonest, fraudulent or criminal act by the Named Insured, a partner therein or an
officer, director employee or trustee thereof, whether acting alone or in collusion with others.
For the purpose of this exclusion an act of vandalism or malicious damage by an employee shall not
constitute a dishonest, fraudulent or criminal act.
C. LOSS PAYMENT BASIS / VALUATION
The valuation of each article of property covered by this Section shall be determined as follows:
a. Property of the Named Insured shall be covered for and valued at the current fair market
value of each article indicated on the books and records of the Named Insured prior to loss,
according to the Named Insured’s valuation of each object covered.
b. Property of others loaned to the Named Insured and for which the Named Insured may be
legally liable, or which the Named Insured has been instructed to insure, shall be covered for
and valued at the amount agreed upon for each article by the Named Insured and owner(s) as
recorded on the books and records of the Named Insured prior to loss.
c. Otherwise, in the absence of recorded current fair market values or agreed values for each
article covered, the Company shall not be liable beyond the fair market value of the property
at the time any loss or damage occurs. Said value shall be ascertained by the Named Insured
and the Company or, if they differ, then the amount of value or loss shall be determined as
provided in the following appraisal clause.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 47 of 72
D. SPECIAL CONDITIONS
1. Misrepresentation and Fraud: This entire Section shall be void if, whether before or after a
loss, the Named Insured has concealed or misrepresented any material fact or circumstance
concerning this Policy or the subject thereof, or the interest of the Named Insured therein, or
in case of any fraud or false swearing by the Named Insured relating thereto.
2. Notice of Loss: The Named Insured shall as soon as practicable report in writing to the
Company or its agent every loss, damage or occurrence which may give rise to a claim under
this Section and shall also file with the Company or its agent within ninety (90) days from the
date of discovery of such loss, damage or occurrence, a detailed sworn proof of loss.
3. Examination under Oath: The Named Insured, as often as may be reasonably required, shall
exhibit to any person designated by the Company all that remains of any property herein
described, and shall submit, and insofar as is within its power cause its employees, Named
Insured and others to submit to examination under oath by any person named by the
Company and subscribe the same; and, as often as may be reasonably required, shall produce
for examination all writings, books of account, bills, invoices and other vouchers, or certified
copies thereof if originals be lost, at such reasonable time and place as may be designated by
the Company or its representative and shall permit extracts and copies thereof to be made.
No such examination under oath or examination of books or documents, nor any act of the
Named Insured or any of its employees or representatives in connection with the
investigation of any loss or claim hereunder, shall be deemed a waiver of any defense which
the Named Insured might otherwise have with respect to any loss or claim, but all such
examinations and acts shall be deemed to have been made or done without prejudice to the
Company’s liability.
4. Settlement of Loss: All adjusted claims shall be paid or made good to the Named Insured
within sixty (60) days after presentation and acceptance of satisfactory proof of interest and
loss at the office of the Company. No loss shall be paid or made good if the Named Insured
has collected the same from others.
5. No Benefit to Bailee: This Section shall in no way inure directly or indirectly to the benefit of
any carrier or other bailee.
6. Subrogation or Loan: If in the event of loss or damage the Named Insured shall acquire any
right of action against any individual, firm or corporation for loss of, or damage to, property
covered hereunder, the Named Insured will, if requested by the Company, assign and transfer
such claim or right of action to the Company or, at the Company’s option, execute and
deliver to the Company the customary form of loan receipt upon receiving an advance of
funds in respect of the loss or damage; and will subrogate the Company to, or will hold in
trust for the Company, all such rights of action to the extent of the amount paid or advanced,
and will permit suit to be brought in the Named Insured’s name under the direction of and at
the expense of the Company.
7. Protection and Preservation of Property: In case of actual or imminent physical loss or
damage of the type insured against by this Policy, the expenses incurred by the Named
Insured in taking reasonable and necessary actions for the temporary protection and
preservation of property insured hereunder shall be added to the total physical loss or damage
otherwise recoverable under the Policy and be subject to the applicable deductible and
without increase in the limit provisions contained in this Policy.
8. Appraisal: If the Named Insured and the Company fail to agree as to the amount of loss, each
shall on the written demand of other, made within sixty (60) days after receipt of proof of loss
by the Company, select a competent and disinterested appraiser, and the appraisal shall be
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 48 of 72
made at a reasonable time and place. The appraisers shall first select a competent and
disinterested umpire, and failing for fifteen (15) days to agree upon such umpire, then on the
request of the Named Insured or the Company, such umpire shall be selected by a judge of a
court of record in the state in which such appraisal is pending. The appraisers shall then
appraise the loss, stating separately the fair market value at the time of loss and the amount of
loss, and failing to agree shall submit their differences to the umpire. An award in writing of
any two shall determine the amount of loss. The Named Insured and the Company shall each
pay their chosen appraiser and shall bear equally the other expenses of the appraisal and
umpire. The Named Insured shall not be held to have waived any of its rights by any act
relating to appraisal.
9. Civil Authority: Property covered under this Section against the peril of fire is also covered
against the risk of damage or destruction by Civil authority during a conflagration and for the
purpose of retarding the same; provided that neither such conflagration nor such damage or
destruction is caused or contributed to by a peril otherwise excluded herein.
10. Changes: Notice to any agent or knowledge possessed by any agent or by any other person
shall not effect a waiver or a change in any part of this Section or stop the Named Insured
from asserting any right under the terms of this Section, nor shall the terms of this Section be
waived or changed except by endorsement issued to form a part of this Section.
11. Additional Covered Party(ies): Corporations, associations, firms, institutions, museums,
persons and others who own or control collections, objects or articles who make them
available to the Named Insured, and temporary borrowers or custodians (but not carriers,
packers or shippers) of property covered, are additional Named Insured(s) hereunder, but
only as respects coverage afforded to said Named Insured’s property.
12. Packing: It is agreed by the Named Insured that the property covered hereunder be packed
and unpacked by competent packers.
13. Other Insurance: This fine arts floater Section is excess coverage over any other valid and
collectible insurance which may apply to any objects of art for which coverage would apply
under this Policy.
14. Pair And Set: In the event of the total loss of any article or articles which are a part of a set,
the Company agrees to pay the Named Insured the full amount of the value of such set and
the Named Insured agrees to surrender the remaining article or articles of the set to the
Company.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 49 of 72
SECTION VI
CONTRACTORS EQUIPMENT
A. COVERAGE
This Policy insures contractors equipment, whether self-propelled or not, including equipment
thereof while attached thereto or located thereon, such as bulldozers, drag lines, power shovels,
derricks, drills, concrete mixers and other machinery of a similar nature, and not subject to motor
vehicle registration.
If any of the property covered by this Section is also covered under any other provisions of the
Policy of which this Section is made a part, those provisions are hereby amended to exclude such
property, the intent being that the coverage under this Section is the sole coverage on such property.
B. PERILS EXCLUDED
This Section insures against all risks of direct physical loss or damage occurring during the policy
period to the above described property from any external cause except as provided below.
1. Loss or damage due to wear, tear, rust, corrosion, latent defect, mechanical breakage or
improper assemblage.
2. Loss or damage due to the weight of the load imposed on the machine exceeding the capacity
for which such machine was designed.
3. Loss or damage to crane or derrick boom(s) and jib(s) of lattice construction while being
operated unless directly caused by fire, lightning, hail, windstorm, earthquake shock,
explosion, riot, riot attending a strike, civil commotion, actual physical contact with an
aircraft or airborne missile including objects falling therefrom, collision with other vehicles
or other contractors equipment whether or not such other equipment is covered hereunder,
landslide, or upset of the unit of which it is a part (but only when and to the same extent that
such other perils are covered by the Policy).
4. Loss or damage due to explosion arising from within steam boilers.
5. Loss or damage to dynamos, exciters, lamps, switches, motors or other electrical appliances
or devices, including wiring, caused by lightning or other electrical currents (artificial or
natural) unless fire ensues and then for the loss by fire only.
6. Loss or damage due to dishonesty of Named Insured’s employees or persons to whom the
Named Insured’s property is entrusted.
7. Loss or damage caused by or contributed to failure of the Named Insured to keep and
maintain the property in a thorough state of repair.
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8. Loss or damage caused by or resulting from:
a. War, hostile or warlike action in time of peace or, including action in hindering,
combating or defending against an actual, impending or expected attack;
i. by any government or sovereign power (de jure or de facto) or by any
authority maintaining using military, naval or air forces or;
ii. any military, naval or air forces or;
iii. by an agent of any such government, power, authority or forces;
b. any weapon of war employing atomic fission or radioactive force whether in time of
peace or war;
c. insurrection, rebellion, revolution, civil war, usurped power, or action taken by
governmental authority in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations, confiscation by order of any
government or public authority, or risks of contraband or illegal transportation or trade;
9. Loss by nuclear reaction or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled, and whether such loss be direct or indirect, proximate or remote,
or be in whole or in part caused by, contributed to, or aggravated by the peril(s) covered
against in this endorsement; however, subject to the foregoing and all provisions of this
Policy, direct loss by fire resulting from nuclear reaction or nuclear radiation or radioactive
contamination is covered against by this Policy.
C. PROPERTY EXCLUDED
1. Automobiles, motorcycles, motor trucks, or parts thereof.
2. Buildings
3. Machinery or equipment or building materials to be installed in any building for the purpose
of becoming a part thereof; nor on any property which has become a permanent part of any
structure.
4. Property that is located underground.
5. Property while waterborne except while being transported on any regular ferry.
6. The storage risk of property not owned or required to be insured by the Named Insured at an
Insured Location, except where incidental to the regular or frequent use of the equipment or
property.
7. Plans, blue prints, designs or specifications.
D. LOSS PAYMENT BASIS / VALUATION
On Contractors Equipment (whether self-propelled or not), on or off premises, where Replacement
Cost (New) values are specified, loss or damage shall be based on 100% of the Replacement Cost
(New) at the time of loss. Partial losses shall be based on the cost of repairing or replacing the
damaged portion, up to the fair market value of the Contractors Equipment. However, should
these costs exceed the fair market value then recovery shall be based upon the Replacement Cost
(New).
If the values, provided by the Named Insured, provides a valuation based on Replacement Cost, then
recovery will be on the same basis, if replaced. If not replaced, the basis of recovery shall be actual
cash value.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 51 of 72
E. SPECIAL CONDITIONS
This section covers property only within the limits of the United States of America.
It is a condition of this Policy that all articles covered hereunder are in sound condition at the time of
attachment of this Policy.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 52 of 72
SECTION VII
ACCOUNTS RECEIVABLE
A. COVERAGE
This Policy covers the loss of or damage resulting from insured perils to the Named Insured’s
records of accounts receivable as defined below, occurring during the policy period.
B. EXCLUSIONS
In addition to the exclusions in the General Conditions, this coverage does not apply:
1. To loss due to any fraudulent, dishonest or criminal act by the Named Insured, a partner
therein, or an officer, director, employee or trustee thereof, while working or otherwise and
whether acting alone or in collusion with others.
For the purpose of this exclusion an act of vandalism or malicious damage by an employee
shall not constitute a dishonest, fraudulent or criminal act.
2. To loss due to bookkeeping, accounting or billing errors or omissions.
3. To loss, the proof of which as to factual existence, is dependent upon an audit of records or
an inventory computation; but this shall not preclude the use of such procedures in support if
claim for loss which the Named Insured can prove through evidence wholly apart therefrom,
is due solely to a risk of loss to records of accounts receivable not otherwise excluded
hereunder.
4. To loss due to alteration, falsification, manipulation, concealment, destruction or disposal of
records of accounts receivable committed to conceal the wrongful giving, taking, obtaining or
withholding of money, securities or other property, but only to the extent of such wrongful
giving, taking, obtaining or withholding.
C. LOSS PAYMENT BASIS / VALUATION
When there is proof that a loss covered by this Policy has occurred but the Named Insured cannot
accurately establish the total amount of accounts receivable outstanding as of the date of such loss,
such amount shall be based on the Named Insured’s monthly statements and shall be computed as
follows:
1. Determine the amount of all outstanding accounts receivable at the end of the same fiscal
month in the year immediately preceding the year in which the loss occurs;
2. Calculate the percentage of increase or decrease in the average monthly total of accounts
receivable for the twelve (12) months immediately preceding the month in which the loss
occurs as compared with such average for the months of the preceding year;
3. The amount determined under (a) above, increased or decreased by the percentage calculated
under (b) above, shall be the agreed total amount of accounts receivable as of the last day of
the fiscal month in which said loss occurs;
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 53 of 72
4. The amount determined under (c) above shall be increased or decreased in conformity with
the normal fluctuations in the amount of accounts receivable during the fiscal month
involved, due consideration being given to the experience of the business since the last day of
the last fiscal month for which statement has been rendered.
There shall be deducted from the total amount of accounts receivable, however established, the
amount of such accounts evidenced by records not lost or damaged or otherwise established or
collected by the Named Insured, and an amount to allow for probable bad debts which would
normally have been uncollectible by the Named Insured. All unearned interest and service charges
shall be deducted.
D. DEFINITIONS:
ACCOUNTS RECEIVABLE
1. All sums due to the Named Insured from customers provided the Named Insured is unable to
effect collection thereof as the direct result of loss or damage to records of accounts
receivable.
2. Interest charges on any loan to offset impaired collections pending repayment of such sums
made uncollectible by such loss or damage.
3. Collection expense in excess of normal collection cost and made necessary because of such
loss or damage.
4. Other expenses, when reasonably incurred by the Named Insured, in re-establishing records
of accounts receivable following such loss or damage.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 54 of 72
SECTION VIII
UNMANNED AIRCRAFT
A. COVERAGE
This Policy insures against all risks of direct physical loss of or damage except as hereafter excluded
occurring during the policy period to Unmanned Aircraft, that are usual to the Named Insured’s
business and that the Named Insured own or are required to insure, sustained while not In Flight or
In Motion and which are not the result of fire or explosion following crash or collision while the
Unmanned Aircraft was In Flight or In Motion that are:
1. Listed on the schedule which is a part of this Policy or which is on file with the Company;
2. Unscheduled but for an amount not to exceed the limit shown on the Declarations
If any of the property covered by this Section is also covered under any other provisions of the
Policy of which this Section is made a part, those provisions are hereby amended to exclude such
property, the intent being that the coverage under this Section is the sole coverage on such property.
B. PERILS EXCLUDED
This Section insures against all risks of direct physical loss or damage occurring during the policy
period to Unmanned Aircraft from any external cause except as provided below.
1. Loss or damage due to the Unmanned Aircraft being In Flight or In Motion including
during propulsion system startup or any time the propulsion system is operating.
2. Loss or damage due to wear, tear, rust, corrosion, latent defect, mechanical breakage,
freezing or improper assemblage.
3. Loss or damage due to the weight of the load imposed on the Unmanned Aircraft exceeding
the capacity for which such Unmanned Aircraft was designed.
4. Loss or damage to tires except where such loss or damage is caused by fire, theft, windstorm
or vandalism or is the direct result of physical damage covered by this Policy.
5. Loss or damage to Unmanned Aircraft while being worked upon except for direct loss or
damage caused by resulting fire or explosion.
6. Loss or damage to dynamos, exciters, lamps, switches, motors or other electrical appliances
or devices, including wiring, caused by lightning or other electrical currents (artificial or
natural) unless fire ensues and then for the loss by fire only.
7. Loss or damage due to conversion, embezzlement or secretion by any person or organization
with legal right to possession of such Unmanned Aircraft under bailment, lease, conditional
sale, purchase agreement, mortgage or other legal agreement that governs the use, sale or
lease of the Unmanned Aircraft, nor for any loss or damage during or resulting therefrom.
8. Loss or damage due to dishonesty of Named Insured’s employees or persons to whom the
Named Insured’s property is entrusted.
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9. Loss or damage caused by or contributed to failure of the Named Insured to keep and
maintain the property in a thorough state of repair.
10. Loss or damage caused by or resulting from:
a. War, hostile or warlike action in time of peace or, including action in hindering,
combating or defending against an actual, impending or expected attack,
i. by any government or sovereign power (de jure or de facto) or by any
authority maintaining using military, naval or air forces; or
ii. any military, naval or air forces; or
iii. by an agent of any such government, power, authority or forces;
b. any weapon of war employing atomic fission or radioactive force whether in time of
peace or war;
c. insurrection, rebellion, revolution, civil war, usurped power, or action taken by
governmental authority in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations, confiscation by order of any
government or public authority, or risks of contraband or illegal transportation or trade;
C. PROPERTY EXCLUDED
1. Unmanned Aircraft that are located in underground mines, caverns or underground storage
facilities.
2. Unmanned Aircraft while waterborne except while being transported on any regular ferry.
3. The storage risk of Unmanned Aircraft not owned or required to be insured by the Named
Insured at an Insured Location, except where incidental to the regular or frequent use of the
equipment or property.
D. LOSS PAYMENT BASIS / VALUATION
On Unmanned Aircraft, on or off premises, where Replacement Cost (New) values are specified,
loss or damage shall be based on 100% of the Replacement Cost (New) at the time of loss. Partial
losses shall be based on the cost of repairing or replacing the damaged portion, up to the fair market
value of the Unmanned Aircraft. However, should these costs exceed the fair market value then
recovery shall be based upon the Replacement Cost (New).
If the values, provided by the Named Insured, provides a valuation other than Replacement Cost,
then recovery will be on the same basis, if replaced. If not replaced, the basis of recovery shall be
actual cash value.
E. SPECIAL CONDITIONS
This section covers property only within the limits of the United States of America.
It is a condition of this Policy that all articles covered hereunder are in sound condition at the time of
attachment of this Policy.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 56 of 72
F. DEFINITIONS
1. UNMANNED AIRCRAFT
Means a powered aerial vehicle that does not carry a human operator, uses aerodynamic forces
to provide vehicle lift, can fly autonomously or be piloted remotely, is recoverable and in some
cases can carry a non-lethal payload including the propulsion system and equipment usually
installed in the vehicle (1) while installed in the vehicle, (2) while temporarily removed from the
vehicle and (3) while removed from the aircraft for replacement until such time as replacement
by a similar item has commenced; also tools and equipment which are specially designed for the
aircraft and which are ordinarily carried therein.
2. IN FLIGHT
Means, with respect to fixed wing Unmanned Aircraft, the time commencing with the actual
take-off run or launch and continuing thereafter until it has completed its landing run; or
capture; and if the Unmanned Aircraft is a rotorcraft, from the time the rotors start to revolve
under power for the purpose of flight until they subsequently cease to revolve after landing; and
if the Unmanned Aircraft is a balloon, while it is inflated or being inflated or deflated.
3. IN MOTION
Means while the Unmanned Aircraft is moving under its own power or the momentum
generated therefrom or while it is In Flight and, if the Unmanned Aircraft is a rotorcraft, any
time the rotors are rotating or while it is In Flight and, if the Unmanned Aircraft is a glider or
balloon, any time it is being transported, towed or while it is In Flight.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 57 of 72
SECTION IX
BOILER AND MACHINERY BREAKDOWN EXTENSION
1. Perils Insured
In consideration of the premium paid and subject to the terms, conditions and Exclusions of the
Policy to which this Extension is attached, and to the following terms and conditions, this Insurance
is extended to cover direct damage to Covered Property caused by a Covered Cause of Loss.
2. Additional Coverage
(a) Hazardous Substance
The additional expense incurred for cleanup, repair or replacement or disposal of damaged,
contaminated or polluted Covered Property as a result of an Accident, which causes property
to become damaged, contaminated or polluted by a substance declared hazardous to health by
an authorized governmental agency. The coverage provided by this clause is sub-limited to
USD as per Declaration Page. For the purpose of this coverage “Additional expense” means
any expense that would not have incurred, if no substance hazardous to health had been
involved in the accident
(b) Ammonia Contamination
The loss, including salvage expense, incurred with respect to damage by ammonia contacting
or permeating Covered Property under refrigeration or in process requiring refrigeration, as a
result of any one Accident to one or more Objects. The coverage provided by this clause is
sub-limited to USD as per Declaration Page.
(c) Water Damage
The loss, including salvage expense, with respect to Covered Property damaged by water,
resulting from any one Accident. The coverage provided by this clause is sub-limited to USD
as per Declaration Page.
(d) Media Coverage
The loss to all forms of electronic, magnetic and optical tapes and discs used in any electronic
computer or electronic data processing equipment directly damaged by an Accident to an
Object. The coverage provided by this clause is sub-limited to USD as per Declaration Page.
For the purpose of this coverage, the valuation basis for “Media” is as follows:
i. For “Media” that are mass-produced and commercially available, at the Replacement
Cost.
ii. For all other “Media”, at the cost of blank material for reproducing the records.
(e) Consequential Damage
The “Consequential Damage” to refrigerated and frozen goods of the Named Insured or for
which the Named Insured is legally liable or under the Named Insured’s care, custody or
control caused solely by an Accident to an Object. For the purpose of this coverage,
“Consequential Damage” is defined as loss due to spoilage from lack of power, light, heat,
steam or refrigeration, resulting from Accident. The coverage provided by this clause is sub-
limited to USD as per Declaration Page.
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(f) Utility Interruption
The loss caused by an Accident to an Object that is owned, operated or controlled by a public
or private entity that the Named Insured has contracted with to furnish them with electrical
utility service including all direct electrical suppliers. The coverage provided by this clause
is sub-limited to USD as per Declaration Page.
(g) CFC Refrigerants and Halon
The replacement of any CFC (chlorofluorocarbon) refrigerant used in refrigeration or air
conditioning equipment or Halon used in a fire suppression system due to an “Accident” to
an Object.
(h) Ordinance or Law
If an Accident to an Object at an Insured Location damages a building that is “Covered
Property”, the Company will pay for
i. Loss to the Undamaged Portion of the Building, meaning loss to the undamaged
portion of the building caused by enforcement of any ordinance or law that:
a. Requires the demolition of parts of the same building not damaged by the
Accident to an Object; or
b. Regulates the construction or repair of buildings, or establishes zoning or land
use requirements at the location of the building.
ii. Demolition Cost meaning the cost to demolish and clear the site of undamaged parts
of the building, caused by the enforcement of building, zoning, or land ordinance or
use.
iii. Increased Cost of Construction, meaning the increased cost to:
a. Repair or reconstruct damaged portions of the building; and
b. Reconstruct or remodel undamaged portions of the building whether or not
demolition is required;
when the increased cost is a consequence of enforcement of building, zoning or land
use ordinance or law. But the Company will only pay for this increased cost if the
building is repaired, reconstructed or remodeled. Also, if the building is repaired,
reconstructed or remodeled, it must be intended for similar occupancy as the current
building, unless such occupancy is not permitted by zoning or land use ordinance or
law.
Insurance under this section only applies with respect to ordinance or law that is in
force at the time of the Accident to an Object. Insurance under this section does not
apply to:
a. Costs associated with the enforcement of any ordinance or law which requires
any Named Insured or others to test for, monitor, clean up, remove, contain,
treat, detoxify, or neutralize, or in any way respond to, or assess the effects of
substances declared to be hazardous to health by a governmental agency; or
b. Loss due to any ordinance or law that:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 59 of 72
i. The Named Insured was required to comply with before the Accident
to an Object even if the building was undamaged; and
ii. The Named Insured failed to comply with.
The coverage provided by this clause is sub-limited to USD as per Declaration Page.
3. Definition of Accident
Accident shall mean a sudden and accidental breakdown of the Object, or a part thereof, which
manifests itself at the time of it occurrence by physical damage to the Object that necessitates repair
or replacement of the Object or part thereof; but Accident shall not mean:
a. depletion, deterioration, corrosion, or erosion of material;
b. wear and tear;
c. leakage at any valve, fitting, shaft seal, gland packing, joint or connection;
d. the breakdown of any vacuum tube, gas tube or brush;
e. the breakdown of any structure or foundation supporting the Object or any part thereof;
f. the functioning of any safety device or protective device.
4. Definition of Object
Except as otherwise specifically designated herein, Object as described below shall mean any
equipment or apparatus which is owned by, leased by or operated under the control of the Named
Insured subject to the Exclusions and Special Provisions specified herein:
a. Any boiler, any fired vessel, any unfired vessel subject to vacuum or internal pressure other
than static pressure of contents, any refrigerating and air conditioning vessels, or any piping
and its accessory equipment, but such Object shall not include:
i. Any boiler setting, any insulating or refractory material,
ii. Any sewer piping, any underground gas piping, any piping forming a part of a
sprinkler system or any water piping other than
a. Feed water piping between any boiler and its feed pumps or injectors
b. Boiler condensate returning piping
b. Any mechanical or electrical machine or electrical apparatus used for the generation,
transmission or utilization of mechanical or electrical power, but Object shall not include
1. Any structure or foundation other than a bedplate of a machine,
2. Any vehicle, elevator, crane, hoist, power shovel or drag line, but not excluding any
electrical equipment used with said machine or apparatus,
3. Any refractory material, or
4. Any penstock or draft tube.
5. Covered Cause of Loss
A Covered Cause of Loss is an “Accident” to an Object insured hereon. An Object must be in use or
connected ready for use at the time of the Accident.
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6. Covered Property
Covered Property, as used in this Extension, means any property not otherwise excluded in this
Policy that:
a. The Named Insured owns; or
b. Is in the Named Insured’s care, custody or control and for which they are legally liable
7. Special Provisions
a. As respects any boiler, fired or unfired vessel, refrigerating system or piping, the Company
shall not be liable for loss from an Accident while said Object is undergoing a hydrostatic,
pneumatic or gas pressure test that exceeds manufacturers recommended limits.
b. As respects any boiler of fired vessel, the Company shall not be liable for loss from an
explosion of gas or unconsumed fuel within the furnace of such Object or within the passages
from the furnace to the atmosphere, whether or not such explosion (a) is contributed to or
aggravated by an Accident to any part of said Object that contains steam or water, or (b) is
caused in whole or in part, directly or indirectly, by any Accident to any Object, or part
thereof, nor shall the Company be liable for any loss from an Accident caused directly or
indirectly by such explosion.
c. As respects any unfired vessel which is used for the storage of gas or liquid and which is
periodically filled, moved, emptied and refilled in the course of its normal service, such
vessel shall be considered as “connected ready for use” within the terms of this Extension of
the Policy.
d. As respects any Object or part of an Object that is being dismantled, reassembled or is in
storage, will be considered as “connected ready for use” within the terms of this Extension of
the Policy.
e. As respects any gas turbine of the internal combustion type, (a) the combustor or such Object
shall not be considered to be a “furnace” as the word is used in the Definition of Accident or
in Special Provision 2 above and (b) the Definition of Accident shall not mean the cracking
of any part of the Turbine exposed to the production of combustion.
f. As respects new turbine generator units, coverage shall not apply until the unit has been
contractually accepted by the Named Insured, that all tests required by the contractor have
been performed and satisfied and the unit has been placed in commercial operation.
8. Valuation
a. The Company will pay the Named Insured the amount the Named Insured spends to repair or
replace the property directly damaged by an Accident. The Company payment will be the
smallest of:
1) The Limit of Insurance;
2) The cost at the time of the Accident to repair the damaged property with property of
like kind, capacity, size and quality;
3) The cost at the time of the Accident to replace the damaged property on the same site
with other property:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 61 of 72
a) Of like kind, capacity, size and quality; and
b) Used for the same purpose
4) The amount the Named Insured actually spends that is necessary to repair or replace
the damaged property.
b. As respects any Object if the cost of repairing or replacing only a part of the Object is greater
than:
1) the cost of repairing the Object; or
2) the cost of replacing the entire Object on the same site;
The Company will pay only the smaller of (1) or (2). The repair parts or replacement Object
must be:
1) of like kind, capacity, size and quality; and
2) used for the same purpose.
c. The Company will not pay:
1) if the loss or damage is to property that is obsolete or useless to the Named Insured; or
2) for any extra cost if the Named Insured decides to repair or replace the damaged
property with property of a better kind or quality or of larger capacity,
d. If the Named Insured does not repair or replace the damaged property within 18 months after
the date of the Accident then the Company will pay on the smaller of the:
1) cost it would have taken to repair; or
2) actual cash value;
at the time of the “accident”.
Paragraph (d) does not apply to any time period beyond the 18 months that the Company agrees to in
writing.
e. As respects CFC (chlorofluorocarbon) refrigerant or Halon, the following valuation basis is
applicable:
1) If the CFC refrigerant or Halon is replaceable, the Named Insured may, at their
option, elect to:
a) Repair or replace the damaged refrigeration equipment, air conditioning
equipment or fire suppression system and replace the lost CFC refrigerant or
Halon subject to it being of like kind, capacity, size and quality and used for
the same purpose; or
b) Change the refrigeration equipment, air conditioning equipment or fire
suppression system, through modification or replacement, to:
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 62 of 72
i. Refrigeration or air conditioning equipment that uses an approved non -
CFC refrigerant; or
ii. A fire suppression system that uses an approved non – Halon agent.
But this option is available only if the change to the equipment or system is made
within 18 months after the date of the Accident or within any extended time period
that the Company agrees to in writing.
If Option 1) b) above is elected, the Company will not pay more than the least of the
following amounts:
a) The Limit of Insurance;
b) The cost at the time of the Accident to repair the damaged refrigeration
equipment, air conditioning equipment or fire suppression system, retrofit the
equipment or system to accept non – CFC refrigerant or non – Halon fire
suppressant, and charge the equipment or system with that refrigerant or fire
suppressant;
c) The cost at the time of the Accident to replace the damaged refrigeration
equipment, air conditioning equipment or fire suppression system with
equipment or a system that is functionally equivalent and uses an approved
non – CFC refrigerant or non – Halon fire suppressant;
d) The amount that the Named Insured actually spend that is necessary to change
the refrigeration equipment, air conditioning equipment or fire suppression
system, through modification or replacement, to equipment or a system that
uses an approved non – CFC refrigerant or non – Halon fire suppressant; or
e) One hundred twenty-five percent (125%) of the amount the Company
otherwise would have paid for loss to the refrigeration equipment, air
conditioning equipment or fire suppression system.
f. If the CFC refrigerant or Halon is not replaceable and:
1) The Named Insured repairs or replaces the damaged equipment within 18 months
after the date of the Accident or within any extended time that the Company agrees to
in writing, the Company will pay the least of the following amounts:
a) The Limit of Insurance;
b) The cost at the time of the Accident to repair the damaged refrigeration
equipment, air conditioning equipment or fire suppression system, retrofit the
equipment or system to accept non – CFC refrigerant or non – Halon fire
suppressant, and charge the equipment or system with that refrigerant or fire
suppressant;
c) The cost at the time of the Accident to replace the damaged refrigeration
equipment, air conditioning equipment or fire suppression system with
equipment or a system that is functionally equivalent and uses an approved
non – CFC refrigerant or non – Halon fire suppressant;
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 63 of 72
d) The amount that the Named Insured actually spend that is necessary to change
the refrigeration equipment, air conditioning equipment or fire suppression
system, through modification or replacement, to equipment or a system that
uses an approved non – CFC refrigerant or non – Halon fire suppressant.
2) If the Named Insured does not replace the damaged equipment within 18 months after
the date of the Accident or within the extended time period that the Company agrees
to in writing, the Company will not pay more than the lesser of:
a) The amount that the Company would have paid if repair or replacement of the
damaged equipment had been made as determined in F 1 above; or
b) The actual cash value of the damaged equipment at the time of the Accident.
g. As respects Insurance under Ordinance and Law, the most the Company will pay as a result
of any one Accident for:
a) Loss to the Undamaged portion of the building is included in the Limit of Insurance
that otherwise applies to the damaged building. But in no event will the amount the
Company pay for loss to the building, including the loss in value of the undamaged
portion of the building due to enforcement of an ordinance or law to which this
coverage applies, exceed:
i. The amount that the Named Insured actually spend to repair, rebuild or replace
the building, but not more than the amount it would cost to restore the building
on the same premises and to the same height, floor area, style and comparable
quality of the original property insured; or
ii. The actual cash value of the building at the time of loss if the building is not
repaired or replaced.
b) Demolition and Increased Cost of Construction is USD as per Declaration Page,
subject to the following:
i. With respect to the coverage provided for Demolition Cost, the Company will
not pay more than the amount the Named Insured actually spend to demolish
and clear the site of the undamaged parts of the building;
ii. With respect to the coverage provided for Increased Cost of Construction:
(a) The Company will not pay for the Increased Cost of Construction:
Until the building is actually repaired or replaced at the same or
another premises; and
Unless the repairs or replacement are made as soon as reasonably
possible after the loss or damage, not to exceed 18 months. The
Company may extend this period in writing during the 18 months.
(b) If the building is repaired or replaced at the same location, or if the
Named Insured elect to rebuild at another location, the most the
Company will pay for the increased cost of construction is the
increased cost of construction at the same location.
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(c) If the ordinance or law requires relocation to another location, the most
the Company will pay for the increased cost of construction is the
increased cost of construction at the new location.
h. If a claim or “suit” is brought against the Named Insured alleging that the Named Insured is
liable for damage to property of another that was caused by an Accident to an Object, the
Company will either:
1. Settle the claim or “suit”, or
2. Defend the Named Insured against the “suit” but reserve the right for themselves to
settle at any point.
9. Exclusions
a. To loss:
1) from explosion of an Object other than:
a) Any steam boiler, steam piping, steam turbine, gas turbine, steam engine, or
b) Any machine when such loss is caused by centrifugal force or mechanical
breakdown,
b. Nuclear reaction or radiation or radioactive contamination however caused, however this
exclusion shall not apply to nuclear medicine at covered hospitals,
c. From fire concomitant with or following an Accident.
d. From an Accident caused directly or indirectly by fire
e. From a combustion explosion outside the Object concomitant with or following an Accident,
f. From an Accident caused directly or indirectly by a combustion explosion outside an Object
10. Conditions:
a. Inspection
The Company shall be permitted but not obligated to inspect the Named Insured’s property
and operations at any reasonable time. Neither the right to make inspections nor the making
thereof nor any advice or report resulting therefrom shall constitute an undertaking, on behalf
of or for the benefit of the Named Insured or others, to determine or warrant that such
property or operations are safe or healthful, or are in compliance with any law, rule or
regulation.
b. Suspension
Upon the discovery of a dangerous condition with respect to any Object, Alliant Insurance
Services, Inc., may immediately suspend the insurance, with respect to an Accident to said
Object, by written notice mailed or delivered to the Named Insured at the address of the
Named Insured stated in the Declaration Page, or at the location of the Object, as stated for it
in a schedule or endorsement. The insurance so suspended may be reinstated by the
Company but only by an endorsement issued to form a part of this Policy. The Named
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 65 of 72
Insured shall be allowed the unearned portion of the premium paid for such suspended
insurance, pro rata for the period of suspension.
c. Notice of Accident and Adjustments
When an Accident occurs, written notice shall be given to the Company as soon as
practicable. The Company shall be given like notice of any claim made on account of such
Accident. The Company or their representative shall have reasonable time and opportunity to
examine the property, and the Insured Location of Risk, before repairs are undertaken or
physical evidence of the Accident is removed, except for protection or salvage. Proof of loss
shall be made in such form as the Company may require. If suit is brought against the
Named Insured for loss to which this Section of the Policy is applicable, any summons or
other process served upon the Named Insured shall be forwarded immediately to the
Company.
d. Deductible
In the event of an Accident to an Object as insured under this Extension that is concomitant
with or followed by physical loss or damage incurred under the All Risk policy that this
Extension attached to, the deductible to be applied to the total loss shall be the highest
applicable deductible.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 66 of 72
PROGRAM AND/OR NAMED INSURED AND/OR DECLARATION SPECIFIC
ENDORSEMENTS TO BE PROVIDED AFTER THE ABOVE PAGE
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 67 of 72
ENDORSEMENT 1
CANCELLATION CLAUSE AMENDMENT
DUE TO FINANCIAL STRENGTH DOWNGRADE ENDORSEMENT
It is hereby understood and agreed that Section IV, General Conditions, Clause N, Cancellation of this
Policy is amended.
This endorsement modifies insurance provided by the Policy:
The Cancellation Provision, Cancellation Condition, or Cancellation Clause, whichever is applicable, is
amended by adding the following paragraph to the end thereof:
Notwithstanding any other terms or conditions of this Policy to the contrary, in the event that the
financial strength rating of the Company is downgraded to: (1) below A- by A.M. Best Co., or (2)
below BBB by Standard & Poor’s Ratings Services (hereinafter, the Credit Rating Downgrade), this
Policy may be canceled by the FIRST NAMED INSURED by mailing prior written notice to the
Company or by surrender of this Policy to the Company.
If this Policy is canceled by the First Named Insured due to such Credit Rating Downgrade, then
the Company shall return the unearned pro rata proportion of the premium as of the effective date of
cancellation and shall waive any minimum earned premium requirement specified herein.
The following definitions apply to this endorsement:
1. Company means Lexington Insurance Company.
2. First Named Insured means the first Named Insured as shown on the Declarations page of this
Policy.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 68 of 72
ENDORSEMENT 2
COVERAGE TERRITORY ENDORSEMENT
This endorsement modifies insurance provided by the Policy:
The Insurer shall not be deemed to provide cover and the Insurer shall not be liable to pay any claim or
provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or
provision of such benefit would expose the Insurer, its parent company or its ultimate controlling entity to
any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions,
laws or regulations of the European Union or the United States of America.
PR4225 (07/13)
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 69 of 72
ENDORSEMENT 3
WAR AND TERRORISM EXCLUSION ENDORSEMENT
(Applies worldwide)
Notwithstanding any provision to the contrary within this insurance or any endorsement thereto it is agreed
that this insurance excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused
by, resulting from or in connection with any of the following regardless of any other cause or event
contributing concurrently or in any other sequence to the loss;
(1) war, invasion, acts of foreign enemies, hostilities or warlike operations (whether war be declared or
not), civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or
amounting to an uprising, military or usurped power; or
(2) any act of terrorism.
For the purpose of this endorsement an act of terrorism means an act, including but
not limited to the use of force or violence and/or the threat thereof, of any person or
group(s) of persons, whether acting alone or on behalf of or in connection with any
organization(s) or government(s), committed for political, religious, ideological or
similar purposes including the intention to influence any government and/or to put the
public, or any section of the public, in fear.
This endorsement also excludes loss, damage, cost or expense of whatsoever nature directly or indirectly
caused by, resulting from or in connection with any action taken in controlling, preventing, suppressing or in
any way relating to (1) and/or (2) above.
If the Underwriters allege that by reason of this exclusion, any loss, damage, cost or expense is not covered
by this insurance the burden of proving the contrary shall be upon the Assured.
In the event any portion of this endorsement is found to be invalid or unenforceable, the remainder shall
remain in full force and effect.
NMA2918
08/10/2001
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 70 of 72
ENDORSEMENT 4
COMMUNICABLE DISEASE EXCLUSION
1. This policy, subject to all applicable terms, conditions and exclusions, covers losses attributable to
direct physical loss or physical damage occurring during the period of insurance. Consequently and
notwithstanding any other provision of this policy to the contrary, this policy does not insure any loss,
damage, claim, cost, expense or other sum, directly or indirectly arising out of, attributable to, or
occurring concurrently or in any sequence with a Communicable Disease or the fear or threat (whether
actual or perceived) of a Communicable Disease.
2. For the purposes of this endorsement, loss, damage, claim, cost, expense or other sum, includes, but is
not limited to, any cost to clean-up, detoxify, remove, monitor or test:
2.1. for a Communicable Disease, or
2.2. any property insured hereunder that is affected by such Communicable Disease.
3. As used herein, a Communicable Disease means any disease which can be transmitted by means of
any substance or agent from any organism to another organism where:
3.1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other
organism or any variation thereof, whether deemed living or not, and
3.2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne
transmission, bodily fluid transmission, transmission from or to any surface or object, solid,
liquid or gas or between organisms, and
3.3. the disease, substance or agent can cause or threaten damage to human health or human welfare
or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of
use of property insured hereunder.
4. This endorsement applies to all coverage extensions, additional coverages, exceptions to any exclusion
and other coverage grant(s).
All other terms, conditions and exclusions of the policy remain the same.
LMA5393
25 March 2020
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 71 of 72
ENDORSEMENT 5
PROPERTY CYBER AND DATA ENDORSEMENT
1 Notwithstanding any provision to the contrary within this Policy or any endorsement thereto this
Policy excludes any:
1.1 Cyber Loss, unless subject to the provisions of paragraph 2;
1.2 loss, damage, liability, claim, cost, expense of whatsoever nature directly or indirectly caused
by, contributed to by, resulting from, arising out of or in connection with any loss of use,
reduction in functionality, repair, replacement, restoration or reproduction of any Data, including
any amount pertaining to the value of such Data, unless subject to the provisions of paragraph 3;
regardless of any other cause or event contributing concurrently or in any other sequence thereto.
2 Subject to all the terms, conditions, limitations and exclusions of this Policy or any endorsement
thereto, this Policy covers physical loss or physical damage to property insured under this Policy
caused by any ensuing fire or explosion which directly results from a Cyber Incident, unless that
Cyber Incident is caused by, contributed to by, resulting from, arising out of or in connection with a
Cyber Act including, but not limited to, any action taken in controlling, preventing, suppressing or
remediating any Cyber Act.
3 Subject to all the terms, conditions, limitations and exclusions of this Policy or any endorsement
thereto, should Data Processing Media owned or operated by the Insured suffer physical loss or
physical damage insured by this Policy, then this Policy will cover the cost to repair or replace the
Data Processing Media itself plus the costs of copying the Data from back-up or from originals of a
previous generation. These costs will not include research and engineering nor any costs of recreating,
gathering or assembling the Data. If such media is not repaired, replaced or restored the basis of
valuation shall be the cost of the blank Data Processing Media. However, this Policy excludes any
amount pertaining to the value of such Data, to the Insured or any other party, even if such Data
cannot be recreated, gathered or assembled.
4 In the event any portion of this endorsement is found to be invalid or unenforceable, the remainder
shall remain in full force and effect.
5 This endorsement supersedes and, if in conflict with any other wording in the Policy or any
endorsement thereto having a bearing on Cyber Loss, Data or Data Processing Media, replaces that
wording.
Definitions
6 Cyber Loss means any loss, damage, liability, claim, cost or expense of whatsoever nature directly or
indirectly caused by, contributed to by, resulting from, arising out of or in connection with any Cyber
Act or Cyber Incident including, but not limited to, any action taken in controlling, preventing,
suppressing or remediating any Cyber Act or Cyber Incident.
Public Entity Property Insurance Program (PEPIP) Form No.17 Page 72 of 72
7 Cyber Act means an unauthorized, malicious or criminal act or series of related unauthorized,
malicious or criminal acts, regardless of time and place, or the threat or hoax thereof involving access
to, processing of, use of or operation of any Computer System.
8 Cyber Incident means:
8.1 any error or omission or series of related errors or omissions involving access to, processing of,
use of or operation of any Computer System; or
8.2 any partial or total unavailability or failure or series of related partial or total unavailability or
failures to access, process, use or operate any Computer System.
9 Computer System means:
9.1 any computer, hardware, software, communications system, electronic device (including, but not
limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller
including any similar system or any configuration of the aforementioned and including any
associated input, output, data storage device, networking equipment or back up facility, owned
or operated by the insured or nay other party.
10 Data means information, facts, concepts, code or any other information of any kind that is recorded or
transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.
11 Data Processing Media means any property insured by this Policy on which Data can be stored but not
the Data itself.
LMA5400
11 November 2019